Which one of the following statements about the Personal Property Security Act is true?
A) This legislation applies only to all present transactions where personal property is given as security interest to enforce an obligation.
B) Unless a creditor in a secured transaction covered by this act takes steps to attach and perfect his security interest, he could lose that interest to someone outside the contract.
C) In a situation where a debtor fraudulently attempts to transfer property that he has given as security, the Act is designed to protect both the debtor and the secured creditor.
D) If a secured creditor fails to register his security interest in the Personal Property Registry, he loses his rights against the debtor.
E) If someone suspects that an item of personal property has been given as security by a particular person, he can sue on the breach of a condition.

Question

Quizplus · Accepted Answer

The Personal Property Security Act (PPSA) is designed to regulate security interests in personal property. One of its key provisions is that a creditor must take specific steps, such as attaching and perfecting their security interest, to ensure their rights are protected against third parties. Failure to do so could result in the creditor losing their interest to someone who was not a party to the original contract, such as another creditor who has perfected their interest or a buyer in good faith. This is why option B is correct.

Which One of the Following Statements About the Personal Property