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Contemporary Canadian Business Law

Business

Quiz 29 :

Security for Debt

Quiz 29 :

Security for Debt

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Which debt instruments do public corporations utilize to raise money from the market?
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Multiple Choice
Answer:

Answer:

C

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Wen purchased an automobile from Nick for $10,000. Unknown to Wen, Nick had used the automobile as security for a loan from his bank, and the bank had registered its security interest in the automobile under the provincial personal property security registration legislation. A few months after the sale, Nick defaulted on the loan, and the bank discovered that Wen was in possession of the automobile. The bank is not entitled to seize the automobile, because it had not given Wen notice of its claim against the vehicle before Wen purchased it.
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True False
Answer:

Answer:

False

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In what transaction does title not transfer?
Free
Multiple Choice
Answer:

Answer:

A

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A is an unsecured creditor in a car loan agreement dated January 1, 2020. B is a secured creditor in an unregistered chattel mortgage dated January 2, 2020. C is a secured creditor in a registered chattel mortgage dated January 3, 2020 and registered on January 13, 2020. D is a secured creditor in a registered chattel mortgage dated January 4, 2020 and registered on January 12, 2020. E is a secured creditor in a registered chattel mortgage dated and registered on January 5, 2020. Which of the following creditors has the highest priority?
Multiple Choice
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The purpose of _______________________ is to provide ___________________ with ______________________.
Multiple Choice
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Jeff entered into a building contract with Mike under which Jeff agreed to construct a garage on Mike's lot for $60,000. Lumber Supply Company supplied the lumber at Jeff's request, but when Jeff failed to pay for the material within a few weeks after it was supplied, the company filed a construction lien for $30,000 against Mike's property. The lumber company has no right of lien because it has a contractual relationship with Jeff only, and must look to Jeff for payment.
True False
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Security under Section 427 of the Bank Act gives a Chartered Bank security
Multiple Choice
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Which transaction is not registered under the Personal Property Securities Act?
Multiple Choice
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A secured creditor under a chattel mortgage has
Multiple Choice
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Appliance Paradise sold Carson a refrigerator by Conditional Sale Agreement, duly registered. Carson some months later, in the course of moving to another province offered it to a neighbour, Jones, who was helping Carson load his van. Jones recognized it as a bargain and in good faith paid Carson. On demand from Appliance Paradise, Carson refused to make further payments. Jones refuses to pay, citing that he is a bona fide purchaser for value. Appliance Paradise
Multiple Choice
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On graduation, you start a small business consulting service operating from leased premises, and one year into business you borrow $25,000 from a bank. The best (being the most useful) security the bank can likely get from you is probably
Multiple Choice
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Wen purchased an automobile from Nick for $10,000. Unknown to Wen, Nick had used the automobile as security for a loan from his bank, and the bank had registered its security interest in the automobile under the provincial personal property security registration legislation. A few months after the sale, Nick defaulted on the loan, and the bank discovered that Wen was in possession of the automobile. The bank only has recourse against Nick for the amount owing.
True False
Answer:
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Wen purchased an automobile from Nick for $10,000. Unknown to Wen, Nick had used the automobile as security for a loan from his bank, and the bank had registered its security interest in the automobile under the provincial personal property security registration legislation. A few months after the sale, Nick defaulted on the loan, and the bank discovered that Wen was in possession of the automobile. Wen has a good and clear title to the automobile, because he purchased it without knowledge of the bank's claim.
True False
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Jeff entered into a building contract with Mike under which Jeff agreed to construct a garage on Mike's lot for $60,000. Lumber Supply Company supplied the lumber at Jeff's request, but when Jeff failed to pay for the material within a few weeks after it was supplied, the company filed a construction lien for $30,000 against Mike's property. When Mike is notified of the registration of the lien, he must hold back the amount of the lien, or whatever funds he has in his hands at the time, if they should be less than the amount of the claim.
True False
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A property owner is required to maintain a _____________ on a project for the benefit of ________________.
Multiple Choice
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Under a _____________ agreement title in the goods passes to the buyer when the _______________ but under a _______________ agreement title passes to the buyer when the __________________.
Multiple Choice
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Wen purchased an automobile from Nick for $10,000. Unknown to Wen, Nick had used the automobile as security for a loan from his bank, and the bank had registered its security interest in the automobile under the provincial personal property security registration legislation. A few months after the sale, Nick defaulted on the loan, and the bank discovered that Wen was in possession of the automobile. Nick is liable to Wen for breach of warranty of title, if the bank should seize the automobile.
True False
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Which transaction is the most suitable way for a bank to take inventory as security?
Multiple Choice
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Jeff entered into a building contract with Mike under which Jeff agreed to construct a garage on Mike's lot for $60,000. Lumber Supply Company supplied the lumber at Jeff's request, but when Jeff failed to pay for the material within a few weeks after it was supplied, the company filed a construction lien for $30,000 against Mike's property. Lumber Supply Company cannot file a lien against Mike's property because the company is not a subcontractor or workman.
True False
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Doe purchased an automobile from Jones for $1,000. Unknown to Doe, Jones had used the automobile as security for a loan from his bank, and the bank had registered its security in the automobile under the provincial personal property security registration legislation. A few months after the sale, Jones defaulted on his loan, and the bank discovered that Doe was in possession of the automobile. Which of the following are true?
Multiple Choice
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