Cutco Lawn Products Manufacturing Company sells 100 riding lawn mowers to the Smith Hardware Company,a retailer in the same industry.Smith pays for the mowers with a $50,000 loan from the Bass Bank.The Bank takes a security interest in the mowers to secure payment of the loan,and perfects it by filing.Later,Smith sells one of the mowers to Carl,a consumer,who buys in good faith and in the ordinary course of Smith's business.However,Carl knows that the Bank has a security interest in the mowers.Smith defaults on its loan payments,and the Bank moves to repossess all the mowers.Can it repossess the mower sold to Carl?
A) Since the Bank attached its security interest,it may repossess the mower from Carl.
B) Since the mower is in Carl's possession now,the bank has no right over this third party.
C) Since Carl knew about Bass's security interest,the bank may repossess his mower.
D) Since Carl bought the mower in good faith,the bank may not repossess his mower.
Correct Answer:
Verified
Q29: Which of the following is true about
Q42: A buyer in the ordinary course of
Q43: Smith Auto Sales has a secured loan
Q44: Which of the following corresponds to the
Q46: Which of the following is true about
Q46: A perfected purchase money security interest in
Q47: Generally,a buyer in the ordinary course of
Q48: Which section of the UCC defines what
Q48: A secured creditor repossesses the collateral from
Q58: A typewriter,which was subject to a prior
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents