Business Law Today, Comprehensive 10th Edition by Roger LeRoy Miller

Exercise 2

Disposition of Collateral. With a loan of 1.4 million euros from Barclays Bank, Thomas Poynter bought a yacht. The loan agreement gave Barclays multiple stand-alone options on default. One option required the lender to give ten days' advance notice of a sale. A different option permitted the lender to avoid this requirement. When Poynter did not repay the loan, Barclays repossessed the yacht and notified Poynter that it would be sold-but the bank did not specify a date, time, or place. The yacht was sold two months later. Barclays got less than Poynter owed and filed a suit in a federal district court for the deficiency. Is Barclays entitled to collect even though it did not give Poynter ten days' advance notice of the sale Explain.