Which of the following statements about security agreements is false?
A)The security agreement must reasonably describe the collateral so that it can readily be identified.
B)The security agreement cannot require the debtor to insure the goods.
C)The security agreement usually contains a promise by the debtor to pay certain amounts of money in a certain way.
D)The security agreement usually specifies which events constitute a default.

Question

Quizplus · Accepted Answer

The security agreement must reasonably describe the collateral so that it can readily be identified.For example,it should list the year,make,and serial number of an automobile.The security agreement usually spells out the terms of the arrangement between the creditor and the debtor.Also,it normally contains a promise by the debtor to pay certain amounts of money in a certain way.The agreement specifies which events,such as nonpayment by the buyer,constitute a default.In addition,it may contain provisions that the creditor feels are necessary to protect his security interest.For example,the debtor may be required to keep the collateral insured,not to move it without the creditor's consent,or to periodically report sales of secured inventory goods.

Which of the Following Statements About Security Agreements Is False