Law 19 Quizzes
Chp. 29 #1
1. The payment of Brian’s debt to Chuck is guaranteed by Brian’s personal property. This is
a. a reorganization.
b. a secured transaction.
c. a suretyship agreement.
d. a violation of most state laws.
2. The payment of Mo’s debt to Neil is guaranteed by Mo’s personal property. This is
a. governed by Article 2 of the UCC.
b. governed by Article 3 of the UCC.
c. governed by Article 9 of the UCC.
d. not governed by the UCC.
3. The payment of Frida’s debt to Gianini is guaranteed by Frida’s personal property. Gianini is
a. a debtor.
b. a secured party.
c. a secured transaction.
d. a security interest.
4. The payment of Eden’s debt to Flem is guaranteed by Eden’s personal property. This property is
a. a secured party.
b. a secured transaction.
c. a security interest.
d. collateral.
5. The payment of Hu’s debt to Ian is guaranteed by Hu’s personal property. To give public notice of his interest in Hu’s property, Ian is most likely to
a. attach a bright label to Hu’s property.
b. e-mail other potential creditors.
c. file a financing statement with the appropriate authority.
d. publish a collection notice in local newspapers.
6. Dag is the secured party in a secured transaction with Elmo. In this transaction, Dag
a. has a security interest.
b. owes payment.
c. owes performance.
d. owns collateral.
7. Best Credit Corporation lends funds to Cody, a consumer, to apply to the cost of a sport utility vehicle (SUV), which is the collateral for the loan. An enforceable security interest requires
a. a written agreement and Best’s possession of the SUV.
b. a written agreement or Best’s possession of the SUV.
c. a written agreement only.
d. Best’s possession of the SUV only.
8. Olaf is the creditor in a transaction with Phil. Once certain requirements are met, Olaf’s rights will attach, which means that Olaf will have
a. an indivisible ownership right to Phil’s property.
b. an enforceable security interest in Phil’s property.
c. a notice affixed to Phil’s property.
d. the permission of a court to seize Phil’s property.
9. The payment of Jose’s debt to Klint is guaranteed by Jose’s personal property. The process by which Klint can protect himself against the claims of third parties to this property is
a. attachment.
b. communication.
c. perfection.
d. search and seizure.
10. The payment of John’s debt to Kirsten is guaranteed by John’s personal property. Kirsten is most likely to perfect her interest by
a. attaching a bright label to John’s property.
b. calculating the precise amount of John’s debt.
c. correcting grammatical errors in the parties’ written agreement.
d. filing a financing statement with the appropriate authority.
11. Lena borrows from Mac and Nicol, using the same collateral for both loans. Only Nicol has a perfected security interest. Lena defaults on both loans. The party with first rights to the collateral is
a. Lena.
b. Mac and Nicol, in proportion to Lena’s debt to each.
c. Mac only.
d. Nicol only.
12. Rich Financial, Inc., files a financing statement regarding a transaction with Supreme Business Company. To be valid, the financing statement must contain all of the following except
a. a description of the collateral.
b. a statement of the purpose for the transaction.
c. Rich’s name.
d. Standard’s name.
13. Quality Appliance Company allows Reba to take a set of kitchen appliances that she bought from Quality even though she has not paid the full price. Quality’s legally sufficient financing statement in the goods need not include
a. a description of the collateral.
b. a statement of the reason for allowing Reba to take the goods.
c. Quality’s name.
d. Reba’s name.
14. The payment of Nero’s debt to Olly is guaranteed by Nero’s personal property. Nero is located in Pennsylvania. Olly communicates to the appropriate state official a security agreement that uses only Quality Engineering, the trade name of Nero’s business. To perfect Olly’s interest, this is
a. irrelevant.
b. not sufficient.
c. sufficient if Quality Engineering is a sole proprietorship.
d. sufficient if the trade name is spelled correctly or misspelled slightly.
15. Excel Vehicles, Inc., makes and sells automobiles to auto dealers, including Fine Auto Sales. Fine sells the cars to consumers and businesses. A car in Fine’s possession is probably
a. a consumer good.
b. an accession.
c. equipment.
d. inventory.
16. Tech Support Corporation uses its office equipment as collateral for a loan from United Bank. The bank files a financing statement with the secretary of state in the state in which Tech Support was chartered. One year later, Tech Support changes its name to Vector, Inc. United Bank’s perfection will remain effective for
a. four months after the date of the name change.
b. five business days after the date of the name change.
c. six years after the date of the original filing.
d. no time.
17. Excel Vehicles, Inc., makes and sells automobiles to auto dealers, including Fine Auto Sales. Fine sells the cars to consumers and businesses. Holly, a professional driver, buys an Excel from Fine to drive in a Grand Prix race. Holly’s Excel is
a. a consumer good.
b. an accession.
c. equipment.
d. inventory.
18. Tech Support Corporation uses its office equipment as collateral for a loan from United Bank. The bank files a financing statement with the secretary of state in the state in which Tech Support was chartered. One year later, Tech Support changes its name to Vector, Inc. To continue the effectiveness of its perfected interest, United Bank must file
a. a continuation statement after the original filing expires.
b. an amendment to the financing statement before the period expires.
c. a new financing statement immediately.
d. a notice of repossession with all interested creditors.
19. Excel Vehicles, Inc., makes and sells automobiles to auto dealers, including Fine Auto Sales. Fine sells the cars to consumers and businesses. Ira, a police officer, buys an Excel from Fine to drive in his off-duty hours. Ira’s Excel is
a. a consumer good.
b. an accession.
c. equipment.
d. inventory.
20. Region Bank wants to perfect its security interest in timber owned by Superior Lumber, Inc. Most likely, a financing statement should be filed with
a. the local chamber of commerce.
b. the county clerk.
c. the federal loan officer.
d. the secretary of state’s office.
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