Question 1

A purchase money security interest may be automatically perfected if it covers:

Accepted Answer

A)  future advances. 
B)  inventory. 
C)  consumer goods. 
D)  proceeds. 
A)  future advances. 
B)  inventory. 
C)  consumer goods. 
D)  proceeds.

Question 2

Under Article 9 of the Uniform Commercial Code,in what order are proceeds from the sale of collateral by the creditor to be distributed?

Accepted Answer

A)  First, any expenses of repossessing the collateral are paid. Second, the proceeds are used to satisfy the debt. Third, any other junior liens are paid. Finally, if any proceeds remain, the debtor is entitled to them. 
B)  First, the proceeds are used to satisfy the debt. Second, junior liens are paid. Third, any expenses of repossessing the collateral are paid. Finally, if any proceeds remain, the debtor is entitled to them. 
C)  First, the proceeds are used to satisfy the debt. Second, any expenses of repossessing the collateral. Lastly, the debtor is entitled to remaining proceeds. Finally, if any proceeds remain, the debtor is entitled to them. 
D)  First, the junior liens are paid. Second, any expenses of repossessing the collateral are paid. Third, the proceeds are used to satisfy the debt. Finally, if any proceeds remain, the debtor is entitled to them. 
A)  First, any expenses of repossessing the collateral are paid. Second, the proceeds are used to satisfy the debt. Third, any other junior liens are paid. Finally, if any proceeds remain, the debtor is entitled to them. 
B)  First, the proceeds are used to satisfy the debt. Second, junior liens are paid. Third, any expenses of repossessing the collateral are paid. Finally, if any proceeds remain, the debtor is entitled to them. 
C)  First, the proceeds are used to satisfy the debt. Second, any expenses of repossessing the collateral. Lastly, the debtor is entitled to remaining proceeds. Finally, if any proceeds remain, the debtor is entitled to them. 
D)  First, the junior liens are paid. Second, any expenses of repossessing the collateral are paid. Third, the proceeds are used to satisfy the debt. Finally, if any proceeds remain, the debtor is entitled to them.

Question 3

The most common way of perfecting a security interest is by:

Accepted Answer

A)  automatic perfection. 
B)  filing a financing statement. 
C)  taking possession of the collateral. 
D)  mere attachment of the security interest. 
A)  automatic perfection. 
B)  filing a financing statement. 
C)  taking possession of the collateral. 
D)  mere attachment of the security interest.

Question 4

The basic rule established by the Uniform Commercial Code is that when more than one security interest in the same collateral has been filed,the last security interest to be filed has priority over any that is filed later.

Accepted Answer

A) True 
 B)False

Question 5

Under the Uniform Commercial Code,a fixture is defined as goods:

Accepted Answer

A)  bought primarily for business, personal, or household use. 
B)  held for sale or lease to be used under contracts of service. 
C)  that are considered to be a part of the real property. 
D)  other than inventory, farm products, or consumer goods. 
A)  bought primarily for business, personal, or household use. 
B)  held for sale or lease to be used under contracts of service. 
C)  that are considered to be a part of the real property. 
D)  other than inventory, farm products, or consumer goods.

Question 6

The agreement between the creditor and the debtor cannot authorize the creditor to repossess the collateral under any circumstance.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements is true of sale of collateral?

Accepted Answer

A)  In disposing of the collateral, the creditor must use a commercially reasonable method to produce the greatest benefit to himself and not to the debtor. 
B)  The creditor must sell the collateral unless the consumer orally objects to the sale, otherwise, the creditor may keep the collateral in satisfaction of the debt. 
C)  If less than 80 percent of the purchase price has been paid, the creditor may propose to the debtor that the creditor keep the collateral in satisfaction of the debt. 
D)  If the creditor has a security interest in consumer goods and the debtor has paid 60 percent or more of the purchase price, the creditor must sell the repossessed collateral. 
A)  In disposing of the collateral, the creditor must use a commercially reasonable method to produce the greatest benefit to himself and not to the debtor. 
B)  The creditor must sell the collateral unless the consumer orally objects to the sale, otherwise, the creditor may keep the collateral in satisfaction of the debt. 
C)  If less than 80 percent of the purchase price has been paid, the creditor may propose to the debtor that the creditor keep the collateral in satisfaction of the debt. 
D)  If the creditor has a security interest in consumer goods and the debtor has paid 60 percent or more of the purchase price, the creditor must sell the repossessed collateral.

Question 8

Article 9 of the UCC defines what constitutes default.

Accepted Answer

A) True 
 B)False

Question 9

If the creditor has possession of the collateral,the security agreement:

Accepted Answer

A)  should specify the collateral. 
B)  need not be in writing. 
C)  need not specify the collateral. 
D)  should be in writing. 
A)  should specify the collateral. 
B)  need not be in writing. 
C)  need not specify the collateral. 
D)  should be in writing.

Question 10

A perfected security interest in fixtures has priority over the conflicting interest of an encumbrancer or owner of the real property:

Accepted Answer

A)  only if the debtor is in possession of the real property. 
B)  if the security interest is a purchase money security interest. 
C)  if the interest of the encumbrancer arose after the goods became fixtures. 
D)  if the fixtures' security interest is perfected by a "fixtures filing" anytime after the goods became fixtures. 
A)  only if the debtor is in possession of the real property. 
B)  if the security interest is a purchase money security interest. 
C)  if the interest of the encumbrancer arose after the goods became fixtures. 
D)  if the fixtures' security interest is perfected by a "fixtures filing" anytime after the goods became fixtures.

Exam 43: Security Interests in Personal Property

A purchase money security interest may be automatically perfected if it covers:

Under Article 9 of the Uniform Commercial Code,in what order are proceeds from the sale of collateral by the creditor to be distributed?

The most common way of perfecting a security interest is by:

The basic rule established by the Uniform Commercial Code is that when more than one security interest in the same collateral has been filed,the last security interest to be filed has priority over any that is filed later.

Under the Uniform Commercial Code,a fixture is defined as goods:

The agreement between the creditor and the debtor cannot authorize the creditor to repossess the collateral under any circumstance.

Which of the following statements is true of sale of collateral?

Article 9 of the UCC defines what constitutes default.

If the creditor has possession of the collateral,the security agreement:

A perfected security interest in fixtures has priority over the conflicting interest of an encumbrancer or owner of the real property:

Law, Legal Reasoning, and the Legal Profession

Dispute Settlement

Business Ethics and Corporate Social Responsibility

Business and the Constitution

Crimes

Intentional Torts

Negligence and Strict Liability

Licensing and Intellectual Propertypart Two Contracts

The Nature and Origins of Contracts

Creating a Contract: Offers

Creating a Contract: Acceptances

Consideration

Capacity to Contract

Voluntary Consent

Illegality

The Form and Meaning of Contracts

Third Parties Contract Rights

Performance and Remediespart Three Sales

Formation and Terms of Sales Contracts

Warranties and Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contractspart Four Agency and Employment

The Agency Relationship-Creation, duties, and Termination

Liability of Principals and Agents to Third Parties

Employment Laws-Part Five Business Organizations

Which Form of Business Organization

Partnerships

Formation and Termination of Corporations

Management of the Corporate Business

Financing the Corporation and the Role of the Shareholders

Securities Regulation

Legal Liability of Accountantspart Six Property

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance-Part Seven Commercial Paper

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Fund Transfers-Part Eight Credit Transactions

Introduction to Security

Bankruptcy-Part Nine Government Regulation

The Antitrust Laws

Consumer Protection Laws

Environmental Regulation

Filters