Quiz 24: Secured Transactions

Business

Yes, the backhoe is covered by the promissory note because it contained the provision for after-acquired equipment. This means that the bank's security interest automatically attached to equipment purchased after EA signed the note. Most likely, the court will find EA does have sufficient interest as he purchased the backhoe and is in control of the equipment.

Collateral means something that has been pledged as a security against a loan or it is something that has to be forfeited when a loan default occurs. There are different types of collateral like properties , documents of title , accounts , deposit accounts , commercial tort claims , general intangibles , chattel paper , goods and software. Classification of collateral may change categories depending on its holder and how it is being used at a time of default. The following are the classifications of a refrigerator in different circumstances: (a) When a refrigerator is sold by an appliance store , it is the duty and responsibility of the store owner to provide security and insurance of that product to the customer. (b) When a refrigerator is used by a restaurateur in his business , the collateral defaults has to be again bear by the company selling this refrigerator and the maintenance and insurance payments has to be made by the restaurateur. (c) When a refrigerator is installed in a homeowner's kitchen , it is the duty of the homeowner to bear the physical defaults and manufacturing companies as well as appliance selling stores' has to bear the technical faults associated with it.

Security interest in a negotiable instrument against any other party under the UCC (Uniform commercial code) secured transactions article is explained below: As per the UCC secured transactions article, when a debtor defaults, secured party may take possession of the collateral. So, taking possession for the instrument is the best action for security interest in negotiable instruments. Here, as per the UCC secured transactions article, by taking possession of negotiable instrument is the best way to retain the securities from the concern parties. Therefore, Option img is correct. Likewise, As per the UCC secured transactions article, when a debtor defaults, secured party can take possession of collateral transactions. But Option A provides information that filling a security agreement is the best way to retain negotiable instrument parties. Hence, Option A is incorrect. As per the UCC secured transactions article, when a debtor defaults, secured party can take possession of collateral transactions. But Option C provides information that by attaching the requirement is the best way to retain negotiable instrument parties. Hence, Option C is incorrect. As per the UCC secured transactions article, when a debtor defaults, secured party may take possession of collateral transactions. But Option D provides information that by obtaining a duly executed financing statement security agreement is the best way to retain negotiable instrument parties. Hence, Option D is incorrect.

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