Sandy purchases a piece of equipment to use in her business.The seller of the equipment extended credit to Sandy to enable her to purchase the equipment.Sandy signs a security agreement,but the seller of the equipment does not file a financing statement anywhere.Sandy defaults on the loan and the seller of the equipment wants to get possession of the equipment.Can the seller repossess the equipment?

Question

Quizplus · Accepted Answer

The seller can repossess the equipment because there is a valid security agreement. The fact that the seller did not file a financing statement does not prevent them from enforcing the security agreement. This situation pertains to an Article 9 transaction involving commercial goods, not consumer goods. Additionally, automatic perfection only applies in certain situations and is not relevant here.

Sandy Purchases a Piece of Equipment to Use in Her