Exam 11: Secured Transactions and Suretyship

The process by which a security interest becomes enforceable against the debtor with respect to the collateral is known as:

A surety bond that ensures a property owner of the completion of a construction contract or payment of actual damages to the extent of the bond in the event that the contractor fails to complete it is called a _____ bond:

Goods,other than farm products,held by a person for sale or lease or consisting of raw materials,works in progress,or material consumed in a business are known as:

The financing statement is effective for ten years from the date of filing.

A creditor stuck holding a promissory note with only a signature loan will get nothing if the debtor is insolvent.

The situation where the creditor takes the collateral,discharges the debtor,and has no right to seek any deficiency is known as:

The surety has certain defenses to paying.What are they? e.g.,that debtor has defaulted several times before). $\bullet$ General contract defenses: The surety may raise common defenses like incapacity infancy),lack of consideration unless promissory estoppel can be substituted or unless no separate consideration is necessary because the surety's and debtor's obligations arise at the same time),and creditor's fraud or duress on surety.However,fraud by the principal debtor on the surety to induce the suretyship will not release the surety if the creditor extended credit in good faith; if the creditor knows of the fraud perpetrated by the debtor on the surety,the surety may avoid liability. Moderate

A lien creditor is a creditor whose claim is based on operation of law as opposed to a creditor whose claim is based on agreement.

What are the three different types of suretyship?

The property given to a creditor as security for a debt is known as:

A financing statement requires the debtor's signature,unless the creditor is authorized to make the filing without a signature.

An assurance,generally purchased by an employer,to cover employees who are entrusted with valuable property or funds is known as a _____ bond.