The owner of Potter's Pottery also purchased two laptop computers under the name "Potter's Pottery" from BigBox Store for use in the store. Does BigBox Store's security interest automatically perfect?
A) Yes, even though the laptops are used primarily for business, the laptops are consumer goods.
B) Yes, because the laptops are consumer goods, and, for public policy reasons, the security interest in them will always perfect automatically.
C) No, the laptops are purchased for business use and the secured party would have to file a financing statement to perfect the security interest in them.
D) No, the laptops are purchased for business use and the secured party would have to make a notation on the title to perfect the security interest in them.
E) No, even though the laptops are used primarily for business, the laptops are consumer goods and the secured party would have to file a financing statement to perfect the security interest in them.

Question

Quizplus · Accepted Answer

The laptops are purchased for business use, making them equipment rather than consumer goods. For most types of collateral, including equipment, a secured party must file a financing statement to perfect a security interest. Automatic perfection generally does not apply in this context.

The Owner of Potter's Pottery Also Purchased Two Laptop Computers