Ted and Alice own their recreational vehicle subject to a security agreement to Third U.S.Bank to secure the repayment of the purchase money loan.Ted and Alice sell their RV to Bob and Carol,who agree to take over the loan payments to the bank.There is no novation with the bank.Under these facts,if Bob and Carol do not make the loan payments,Third U.S.Bank
A)can sue Bob and Carol only.
B)can sue Ted and Alice only.
C)can sue Bob,Carol,Ted,and Alice.
D)cannot sue anyone but can repossess the RV.

Question

Quizplus · Accepted Answer

Bob and Carol are liable on the contract because they agreed to take over the loan payments. Ted and Alice are also liable because they are the original borrowers. The bank can sue all four parties if the loan payments are not made.

Ted and Alice Own Their Recreational Vehicle Subject to a Security