Show-Me Display Company,a creditor,agrees to sell display cases to Total Retail,Inc.(TRI).TRI agrees to make monthly payments on the cases,which serves as collateral for the debt until the balance is paid.To protect its claim in the collateral,Show-Me should
A)personally contact TRI's other creditors.
B)file a financing statement with the appropriate state or local offi?cial.
C)send notice by mail to TRI's potential customers.
D)station a Show-Me employee on TRI's premises.

Question

Quizplus · Accepted Answer

Filing a financing statement with the appropriate state or local official is the best choice because it puts other potential creditors on notice of Show-Me's claim to the collateral. This protects Show-Me's interest in the collateral and helps ensure that it will be paid if TRI defaults on the payments. The other choices are not necessary or effective in protecting Show-Me's claim.

Show-Me Display Company,a Creditor,agrees to Sell Display Cases to Total