Sam Levenson lent $50,000 to Mort's Auto Sales Limited, a used car retailer. Sam took a chattel mortgage on each of the 10 vehicles on Mort's lot and registered them under the PPSA. Mort's Auto Sales sold the cars to 10 different customers and said nothing about the chattel mortgages to those customers. Mort paid other creditors. Sam received no payment and wants to enforce the chattel mortgage. Which of the following is TRUE?

Question

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Under the Personal Property Security Act (PPSA), there is typically a retail sales exemption that protects consumers who purchase goods in the ordinary course of business from claims by secured creditors. Therefore, the chattel mortgages are not enforceable against the customers.

Sam Levenson Lent $50,000 to Mort's Auto Sales Limited, a Used