Exam 23: Security Interests in Personal Property

A buyer in the ordinary course of business has priority over any security interest created by the seller.

The payment of Hu's debt to Ian is guaranteed by Hu's personal prop?erty. To give notice of his interest in Hu's property to other creditors, Ian is most likely to

Hal's Hardware store defaults on a debt to Intrastate Bank, which takes possession of the collateral securing the debt. Intrastate sells the collat?eral. The proceeds from the sale are applied first to

Efrem owns Fans & Players, a retail sporting goods shop. When Great Hill Lodge, a new ski resort, is built in the area, Efrem decides to expand and borrows a large sum from Hometown Bank. The bank takes a secu?rity interest in Efrem's present inventory and any after-acquired inven?tory as collateral for the loan. The bank properly perfects the security in?terest by filing a financing statement. Efrem's business is profitable, and he begins doubling his inventory. A year later, an avalanche destroys the ski slope and lodge. Efrem's business takes a turn for the worse, and he defaults on his debt to the bank. The bank seeks possession of his en?tire inventory, even though the inventory is twice as large as it was when the loan was made. Efrem claims that the bank has rights to only half of his inventory. Is Efrem correct? Explain.

A purchase-money security interest in consumer goods is perfected automatically at the time of a credit sale.

To take goods free of any security interest, a buyer in the ordinary course of business cannot know about the interest.

Corporate Bank wants to perfect its security interest in inventory owned by Outdoor Outfitters, Inc. Most likely, a financing statement should be filed with

The first security interest to be perfected is the last in priority over any other perfected security interests.

The payment of Yves's debt to Zac is guaranteed by Yves's personal property. Their agreement identifies Yves's property by serial number. To establish Zac's interest, this is most likely

The office in which a financing statement should be filed depends on the creditor's location.

A security interest is enforceable only if the collateral is in the secured party's possession.

The failure to pay a debt as promised is known as default.

Idle Investments, Inc., and Harbor Bank are secured parties with secu?rity interests in property owned by GR8 Manufacturing Corporation. Priority between these security interests is generally determined by

Lena borrows from Mac and Nicol, using the same farm equipment as collateral for both loans. Only Nicol has a perfected security interest. Lena defaults on both loans. The party with first rights to the collateral is

Joan borrows money from Jake under a security agreement. After borrowing the money, Joan buys a new kayak. The kayak is considered

Secured transactions are governed by the Uniform Commercial Code (UCC).

The price that a secured party obtains on a sale of collateral is all that the creditor can recover on the debt.

Middling Credit Corporation asks Little Supply Company to agree to a security agreement that provides for coverage of the proceeds from the sale of after-acquired prop?erty. This is

Jason is the creditor in a transaction with Carol, who is the debtor. Which of the following requirements is not necessary for Jason to have an enforceable security interest?

Valley Furniture Store sells household consumer goods on credit for which Valley files a financing statement to perfect a security interest in the goods. With the filing of subsequent continuation statements, the ef?fectiveness of the statement can be continued