The payment of Nero's debt to Olly is guaranteed by Nero's personal property. Nero is located in Pennsylvania. Olly communicates to the appropriate state official a security agreement that uses only Quality Engineering, the trade name of Nero's business. To perfect Olly's interest, this is
A) irrelevant.
B) not sufficient.
C) sufficient if Quality Engineering is a sole proprietorship.
D) sufficient if the trade name is spelled correctly or misspelled slightly.

Question

Quizplus · Accepted Answer

A security interest in personal property must be attached, meaning the security agreement is authenticated by both parties, value is given, and the debtor has rights in the collateral. It must also be perfected. In this case, Olly's security agreement using only Quality Engineering, the trade name of Nero's business, is not sufficient to perfect Olly's interest. This is because a trade name cannot be used as collateral for a security interest, and the appropriate state official has not been notified of the security interest. Therefore, Olly would need to use Nero's personal property as collateral and comply with Pennsylvania's specific procedures for perfecting a security interest in personal property.

The Payment of Nero's Debt to Olly Is Guaranteed by Nero's