Shariff's Car Depot (SCD) Sells New and Used Cars

Multiple Choice

Shariff's Car Depot (SCD) sells new and used cars.Because it perceived a demand for Tucker Hupmobiles, a type of retro-design vehicle, it purchased several directly from Tucker Auto Inc.Those purchases were made under conditional sales contracts.At the relevant time, SCD paid part, but not all the purchase price.As predicted, SCD received a great deal of consumer interest in the Hupmobiles.It sold one to Ingrid.Several days later, however, SCD fell into serious financial difficulties and defaulted on some of its debts.As it was entitled to do in the circumstances, Tucker purported to exercise its rights to recover all interest in the Hupmobiles that it had conditionally sold to SCd.Which of the following statements is TRUE?

A) Because Tucker retained ownership under the conditional sales contract, SCD could not possibly pass good title to the car to Ingrid.
B) Ingrid is entitled to retain the vehicle only if she proves that (i) she was unaware of the conditional sales contract and (ii) SCD was entitled, under the sales conditional contract, to transfer good title to a purchaser.
C) Ingrid is entitled to retain the vehicle only if Tucker failed to perfect its security interest.
D) Ingrid can retain the vehicle, even if Tucker had a perfected security interest and she knew about it, as long as she paid fair market value.
E) SCD sold the vehicle to Ingrid in the ordinary course of its business and so Ingrid receives it free of the security interest of Tucker.