Exam 28: Secured Transactions and Suretyship

The debtor's rights in collateral must be immediate rights to the possession but need not necessarily be rights that can be conveyed.

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:

If a debtor removes collateral to another state, the original filing remains valid for its original duration.

If, at a time a surety's obligation has matured, the principal can satisfy the obligation but refuses to do so, the surety is entitled to a court order requiring the principal to perform. This is known as:

A person who owes money or a duty of performance to another is known as a(n):

A surety agreement must always be written to be valid.

Attachment is the process by which a security interest becomes enforceable against the debtor with respect to the collateral.

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

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

A chattel mortgage refers to a debt secured against land, buildings, and fixtures.

A surety is a person who promises to pay or perform an obligation owed by the guarantor.

Bond Co. is a surety on a debt Debtor owes to Creditor. Debtor, apparently solvent, refused to pay Creditor, and Creditor turned to Bond Co. Bond Co. now has a right of

A buyer in the ordinary course of business takes free of all security interests in the collateral.

Creditor required that Apex Co. obtain a performance bond for contracting work Apex agreed to perform. The bond issued by Surety contained forged signatures of Apex's principals. The fraud on Surety

George bought a washing machine from Sears, which financed the purchase and which filed a financing statement. George couldn't make the payments, so he sold the machine to his neighbor, Nancy, for her home use.

A person who owes money to another is known as an obligee.

A judicial bond is an assurance, generally purchased by an employer, to cover employees who are entrusted with valuable property or funds.

Dorothy bought a computer for home use, from Computer Store, signed a security agreement and agreed to make monthly payments on the machine. Computer Store filed nothing. Dorothy decided she didn't like the computer so she sold it to her neighbor Charles for his home use, and stopped making payments. Computer Store can repossess the machine from Charles.

Able and Baker agree to stand as sureties for Construction Co. Inc. on its obligation to Bank. Construction Co. failed to pay Bank, Bank demanded performance from Able and Baker, but Baker did not pay. Able may sue Baker to get payment from Baker.

Colleen agrees to co-sign a note with her brother so he can buy an automobile. She is a surety.