Question 1

How long does a debtor have in which to object to a secured party's retention of collateral to satisfy a debt?

Accepted Answer

A)The debtor has 20 days to object to the secured party's retention of the collateral.
B)The debtor has 20 days to object to the secured party's retention of the collateral.
C)The debtor has 20 days to object to the secured party's retention of the collateral.
D)The debtor has 20 days to object to the secured party's retention of the collateral.
E)The debtor has 20 days to object to the secured party's retention of the collateral.

Question 2

Which statement is correct regarding priority in rights to the computer?

Accepted Answer

A)If the PMSI is in noninventory collateral,the PMSI has priority over any other secured perfected interests as long as the PMSI is perfected within 20 days of the debtor's possession of the collateral [UCC 9-324a)].
B)If the PMSI is in noninventory collateral,the PMSI has priority over any other secured perfected interests as long as the PMSI is perfected within 20 days of the debtor's possession of the collateral [UCC 9-324a)].

Question 3

Which of the following is a writing that indicates both a monetary obligation and a security interest in specific goods?

Accepted Answer

A)Chattel paper is a writing that indicates both a monetary obligation and a security
interest in specific goods.
B)Chattel paper is a writing that indicates both a monetary obligation and a security interest in specific goods.
C)Chattel paper is a writing that indicates both a monetary obligation and a security interest in specific goods.
D)Chattel paper is a writing that indicates both a monetary obligation and a security interest in specific goods.
E)Chattel paper is a writing that indicates both a monetary obligation and a security interest in specific goods.

Question 4

If Michael,ABC Electronics,and XYZ Credit have a dispute regarding entitlement to the television,who is likely to win and why?

Accepted Answer

A)When a creditor sells a consumer good to a debtor on a credit basis or a creditor extends a loan to a debtor for the purchase of a consumer good,the security interest in the good perfects automatically.Even though the secured party's interest perfects automatically,however,the secured party must have filed a financing statement to repossess a consumer good from another buyer.
B)When a creditor sells a consumer good to a debtor on a credit basis or a creditor extends a loan to a debtor for the purchase of a consumer good,the security interest in the good perfects automatically.Even though the secured party's interest perfects automatically,however,the secured party must have filed a financing statement to repossess a consumer good from another buyer.
C)When a creditor sells a consumer good to a debtor on a credit basis or a creditor extends a loan to a debtor for the purchase of a consumer good,the security interest in the good perfects automatically.Even though the secured party's interest perfects automatically,however,the secured party must have filed a financing statement to repossess a consumer good from another buyer.
D)When a creditor sells a consumer good to a debtor on a credit basis or a creditor extends a loan to a debtor for the purchase of a consumer good,the security interest in the good perfects automatically.Even though the secured party's interest perfects automatically,however,the secured party must have filed a financing statement to repossess a consumer good from another buyer.
E)When a creditor sells a consumer good to a debtor on a credit basis or a creditor extends a loan to a debtor for the purchase of a consumer good,the security interest in the good perfects automatically.Even though the secured party's interest perfects automatically,however,the secured party must have filed a financing statement to repossess a consumer good from another buyer.

Question 5

Which of the following is true regarding the court's opinion in Price Auto Sales,Inc.v.Sanders,the case in the text in which a debtor sued an auto company for injuries sustained during an attempt to repossess his automobile?

Accepted Answer

A)The court found that the evidence did not conclusively establish repossession was completed,and thus affirmed the trial court's determination that a breach of the peace occurred in the process of the repossession.
B)The court found that the evidence did not conclusively establish repossession was completed,and thus affirmed the trial court's determination that a breach of the peace occurred in the process of the repossession.

Question 6

What is the term for the type of agreement Michael had with ABC Electronics?

Accepted Answer

A)According to the UCC,a PMSI exists when a security interest is retained or
taken by 1)the seller of the collateral to secure part or all of the purchase price or 2)a person who gives something of value to the debtor so that the debtor can gain rights to or use of the collateral UCC 9-103).

Question 7

Assuming a purchase-money security interest is not involved,which of the following is true regarding priority when there are two secured parties and neither has perfected?

Accepted Answer

A)If neither party has perfected its security interest,the party that attached its
security interest first will have first claim to the collateral.
B)If neither party has perfected its security interest,the party that attached its security interest first will have first claim to the collateral.
C)If neither party has perfected its security interest,the party that attached its security interest first will have first claim to the collateral.
D)If neither party has perfected its security interest,the party that attached its security interest first will have first claim to the collateral.
E)If neither party has perfected its security interest,the party that attached its security interest first will have first claim to the collateral.

Question 8

[Dirty Laundry] Morgan planned to start her own laundry business.She borrowed $60,000 from ABC Bank.She used her car and home as collateral and also gave ABC Bank an interest in any property she acquired after the security interest was made.The bank perfected its interest.Morgan purchased a new computer from XYZ Electronics for use in her business.XYZ obtained a purchase money security interest on the computer.Morgan was having problems with cash flow and failed to make payments to XYZ Electronics on the new computer.After the sale and before Morgan stopped making payments,XYZ had filed a financing statement.The electronics store sought to repossess the computer,but the bank opposed that.Morgan's business picked up and she was able to completely repay her loan to the bank and to XYZ.She requested that the bank discontinue its security interest,but the bank did not do so as requested by Morgan,and still had not done so 45 days after Morgan had paid off the loan and requested that the bank terminate its interest.
-________ property is the proper designation for any equipment subject to the bank's security interest that Morgan obtains after the initial loan agreement.

Accepted Answer

A)After-acquired property is property acquired by the debtor after the security
agreement is made.
B)After-acquired property is property acquired by the debtor after the security agreement is made.
C)After-acquired property is property acquired by the debtor after the security agreement is made.
D)After-acquired property is property acquired by the debtor after the security agreement is made.
E)After-acquired property is property acquired by the debtor after the security agreement is made.

Question 9

What did the court conclude in the Case Opener,the case in which the plaintiff claimed that her repossessed vehicle was not sold in a commercially reasonably manner and that she was wrongly left with a deficiency?

Accepted Answer

A)Recovery of a deficiency on the loan was barred because the court found that the secured party failed to prove that its sale of the vehicle was commercially reasonable and in conformity with established industry practices.
B)Recovery of a deficiency on the loan was barred because the court found that the secured party failed to prove that its sale of the vehicle was commercially reasonable and in conformity with established industry practices.
C)Recovery of a deficiency on the loan was barred because the court found that the secured party failed to prove that its sale of the vehicle was commercially reasonable and in conformity with established industry practices.
D)Recovery of a deficiency on the loan was barred because the court found that the secured party failed to prove that its sale of the vehicle was commercially reasonable and in conformity with established industry practices.
E)Recovery of a deficiency on the loan was barred because the court found that the secured party failed to prove that its sale of the vehicle was commercially reasonable and in conformity with established industry practices.

Question 10

is a writing that demonstrates a right to payment of money.

Accepted Answer

A)An instrument is a writing that demonstrates a right to payment of money.
B)An instrument is a writing that demonstrates a right to payment of money.
C)An instrument is a writing that demonstrates a right to payment of money.
D)An instrument is a writing that demonstrates a right to payment of money.
E)An instrument is a writing that demonstrates a right to payment of money.

Question 11

Which of the following is false regarding a creditor's rights to collateral upon a debtor's default?

Accepted Answer

A)If the debtor objects to the secured party's retention of the collateral,the secured party must sell or dispose of the collateral.
B)If the debtor objects to the secured party's retention of the collateral,the secured party must sell or dispose of the collateral.
C)If the debtor objects to the secured party's retention of the collateral,the secured party must sell or dispose of the collateral.
D)If the debtor objects to the secured party's retention of the collateral,the secured party must sell or dispose of the collateral.
E)If the debtor objects to the secured party's retention of the collateral,the secured party must sell or dispose of the collateral.

Question 12

Which of the following is true if a buyer of a consumer good subject to purchase-money security interest later sells the good?

Accepted Answer

A)Under the UCC,as long as the buyer is not aware of the security interest,purchases the good for his or her personal use,and purchases the good before the secured party files a financing statement,the buyer obtains the good free of the security interest [UCC 9-320b)].Even though the secured party's interest in consumer goods perfects automatically,the secured party must have filed a financing statement to repossess a consumer good from another buyer.
B)Under the UCC,as long as the buyer is not aware of the security interest,purchases the good for his or her personal use,and purchases the good before the secured party files a financing statement,the buyer obtains the good free of the security interest [UCC 9-320b)].Even though the secured party's interest in consumer goods perfects automatically,the secured party must have filed a financing statement to repossess a consumer good from another buyer.
C)Under the UCC,as long as the buyer is not aware of the security interest,purchases the good for his or her personal use,and purchases the good before the secured party files a financing statement,the buyer obtains the good free of the security interest [UCC 9-320b)].Even though the secured party's interest in consumer goods perfects automatically,the secured party must have filed a financing statement to repossess a consumer good from another buyer.
D)Under the UCC,as long as the buyer is not aware of the security interest,purchases the good for his or her personal use,and purchases the good before the secured party files a financing statement,the buyer obtains the good free of the security interest [UCC 9-320b)].Even though the secured party's interest in consumer goods perfects automatically,the secured party must have filed a financing statement to repossess a consumer good from another buyer.
E)Under the UCC,as long as the buyer is not aware of the security interest,purchases the good for his or her personal use,and purchases the good before the secured party files a financing statement,the buyer obtains the good free of the security interest [UCC 9-320b)].Even though the secured party's interest in consumer goods perfects automatically,the secured party must have filed a financing statement to repossess a consumer good from another buyer.

Question 13

[Overextended Debtor] Michael bought a flat screen television for his living room from ABC Electronics,and financed the purchase through ABC Electronics.Later,Michael bought a boat,a new car,and an expensive engagement ring for his girlfriend,and found he was unable to continue making payments on the television.The manager of ABC Electronics called 60 days after the sale and asked Michael to return the television.Michael refused on the basis that ABC Electronics never perfected its interest in the television.He also explained that he had later granted a secured interest in the television along with his other goods to XYZ Credit in return for a loan.No financing statement was filed on behalf of ABC Electronics although XYZ Credit,with no knowledge of any interest of ABC Electronics,did file a financing statement.
-What is the proper designation for the television,under the UCC?

Accepted Answer

A)A consumer good is a good used or bought for use primarily for personal,family,
or household purposes [UCC 9-10223)].
B)A consumer good is a good used or bought for use primarily for personal,family,or household purposes [UCC 9-10223)].
C)A consumer good is a good used or bought for use primarily for personal,family,or household purposes [UCC 9-10223)].
D)A consumer good is a good used or bought for use primarily for personal,family,or household purposes [UCC 9-10223)].
E)A consumer good is a good used or bought for use primarily for personal,family,or household purposes [UCC 9-10223)].

Question 14

Which of the following is a term used to identify a person who routinely buys goods in good faith from a person who routinely sells these goods?

Accepted Answer

A)A buyer in the ordinary course of business is a person who routinely buys goods
in good faith from a person who routinely sells these goods.
B)A buyer in the ordinary course of business is a person who routinely buys goods in good faith from a person who routinely sells these goods.
C)A buyer in the ordinary course of business is a person who routinely buys goods in good faith from a person who routinely sells these goods.
D)A buyer in the ordinary course of business is a person who routinely buys goods in good faith from a person who routinely sells these goods.
E)A buyer in the ordinary course of business is a person who routinely buys goods in good faith from a person who routinely sells these goods.

Question 15

Which of the following is an amendment to a financing statement that states that the debtor has no obligation to the secured party?

Accepted Answer

A)A termination statement is an amendment to a financing statement that provides
that the debtor has no obligation to the secured party [UCC 9-513a)].
B)A termination statement is an amendment to a financing statement that provides that the debtor has no obligation to the secured party [UCC 9-513a)].
C)A termination statement is an amendment to a financing statement that provides that the debtor has no obligation to the secured party [UCC 9-513a)].
D)A termination statement is an amendment to a financing statement that provides that the debtor has no obligation to the secured party [UCC 9-513a)].
E)A termination statement is an amendment to a financing statement that provides that the debtor has no obligation to the secured party [UCC 9-513a)].

Question 16

Which of the following is true regarding the definition of default under the UCC?

Accepted Answer

A)The UCC does not define default.
B)The UCC does not define default.
C)The UCC does not define default.
D)The UCC does not define default.
E)The UCC does not define default.

Question 17

Which of the following is true regarding the manner in which a secured party may sell collateral?

Accepted Answer

A)The secured party may sell the collateral in a private or public sale.
B)The secured party may sell the collateral in a private or public sale.
C)The secured party may sell the collateral in a private or public sale.
D)The secured party may sell the collateral in a private or public sale.
E)The secured party may sell the collateral in a private or public sale.

Question 18

Which statement is true regarding Michael's statement that the security interest of ABC was not perfected?

Accepted Answer

A)When a creditor sells a consumer good to a debtor on a credit basis or a creditor extends a loan to a debtor for the purchase of a consumer good,the security interest in the good perfects automatically.
B)When a creditor sells a consumer good to a debtor on a credit basis or a creditor extends a loan to a debtor for the purchase of a consumer good,the security interest in the good perfects automatically.
C)When a creditor sells a consumer good to a debtor on a credit basis or a creditor extends a loan to a debtor for the purchase of a consumer good,the security interest in the good perfects automatically.
D)When a creditor sells a consumer good to a debtor on a credit basis or a creditor extends a loan to a debtor for the purchase of a consumer good,the security interest in the good perfects automatically.
E)When a creditor sells a consumer good to a debtor on a credit basis or a creditor extends a loan to a debtor for the purchase of a consumer good,the security interest in the good perfects automatically.

Question 19

Which statement is correct regarding the effect of XYZ Electronics filing a financing statement?

Accepted Answer

A)The most common way to perfect an interest is to file a financing statement with a state agency.
B)The most common way to perfect an interest is to file a financing statement with a state agency.
C)The most common way to perfect an interest is to file a financing statement with a state agency.
D)The most common way to perfect an interest is to file a financing statement with a state agency.
E)The most common way to perfect an interest is to file a financing statement with a state agency.

Question 20

Which of the following is true regarding priority in a dispute involving a purchase-money security interest in business goods other than inventory?

Accepted Answer

A)If the PMSI is in noninventory collateral,the PMSI has priority over any other secured perfected interests as long as the PMSI is perfected within 20 days of the debtor's possession of the collateral [UCC 9-324a)].
B)If the PMSI is in noninventory collateral,the PMSI has priority over any other secured perfected interests as long as the PMSI is perfected within 20 days of the debtor's possession of the collateral [UCC 9-324a)].
C)If the PMSI is in noninventory collateral,the PMSI has priority over any other secured perfected interests as long as the PMSI is perfected within 20 days of the debtor's possession of the collateral [UCC 9-324a)].
D)If the PMSI is in noninventory collateral,the PMSI has priority over any other secured perfected interests as long as the PMSI is perfected within 20 days of the debtor's possession of the collateral [UCC 9-324a)].
E)If the PMSI is in noninventory collateral,the PMSI has priority over any other secured perfected interests as long as the PMSI is perfected within 20 days of the debtor's possession of the collateral [UCC 9-324a)].

Quiz 30: Secured Transactions