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29-2

Page history last edited by abogado 12 years, 1 month ago

Law 19 Quizzes

Chapter 29 - #2 Quiz

1. The payment of Yves’s debt to Zach is guaranteed by Yves’s personal property. Their agreement describes Yves’s subject property by serial number. To establish Zach’s interest, this is

 

a. irrelevant.

b. not sufficient.

c. sufficient if it accurately describes the parties’ agreement.

d. sufficient unless it is too tedious to review.


 

2. Select Furniture Store sells household consumer goods. To create a pur­chase-money security interest, Select Furniture must

 

a. assign, to a collecting agent, a portion of its accounts payable.

b. assign, to a collecting agent, a portion of its accounts receivable.

c. extend credit for part or all of the purchase price of the goods.

d. refer purchasers to a third-party lender.


 

3. County Bank wants to perfect its security interest in collateral owned by Delta Sales Company. 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.


 

4. City Bank’s financing statement in collateral owned by Delta Corporation will expire in less than a year. Filed timely, a continuation statement could extend the effectiveness of the financing statement for

 

a. one year.

b. two years.

c. five years.

d. ten years.


 

5.  Mona lives in New Jersey, but she works in New York. Mona borrows $1,000 from National Bank, using her motorcycle as collateral. To perfect its security in­terest, the bank must file its financing statement in at least

 

a. every state.

b. New Jersey.

c. New Jersey and New York.

d. New York.


 

6. Kwik Credit Corporation asks Little Supply Company to agree to a security agreement that provides for coverage of the proceeds from the sale of after-acquired prop­erty. This is

 

a. a first-in, first-out rule.

b. a floating lien.

c. a funds guaranty.

d. in violation of secured transactions law.


 

 

7.  Everyday Loans, Inc., takes possession of Frank’s stock in Gamma Corporation to perfect Everyday’s security interest in the stock. This is

 

a. after-acquired property.

b. a pledge.

c. a purchase-money security interest.

d. proceeds.


 

8.  Excel Investments, Inc., and First State Bank are secured parties with security interests in property owned by GR8 Manufacturing Corporation. Priority between these security interests is generally determined by

 

a. the amount of the claim.

b. the custom in the trade.

c. the time of perfection.

d. the time the security agreement was signed.


9. Property Investments, Inc., files a financing statement to provide no­tice of its security interest in the property of Qwik’s Restaurant. The initial ef­fec­tive term of a financing statement is a period of

 

a. five days.

b. five months.

c. five weeks.

d. five years.


            10.    General Leasing Company (GLC) buys equipment for use as inventory, borrow­ing $1 million from Helpful Finance Corporation for a security in­terest in the equipment. The next day, GLC borrows $500,000 from Interstate Bank, also for a security interest in the equipment. GLC defaults on the loans.   Suppose that Helpful perfects its se­curity in­ter­est when GLC takes possession of the equipment. In that cir­cum­stance, the party with pri­ority to the collateral on GLC’s default would be

 

a. GLC.

b. Helpful and Interstate proportionately.

               c. Helpful only.

d. Interstate only.


 

11.  Dependable Credit Corporation asks Electric Supply Company to agree to a security agreement that provides for coverage of the proceeds from the sale of after-acquired prop­erty. This is

 

a. a first-in, first-out rule.

b. a floating lien.

c. a funds guaranty.

d. a future advance.


 

               12.  General Leasing Company (GLC) buys equipment for use as inventory, borrow­ing $1 million from Helpful Finance Corporation for a security in­terest in the equipment. The next day, GLC borrows $500,000 from Interstate Bank, also for a security interest in the equipment. GLC defaults on the loans.    Suppose that two weeks after GLC takes possession of the equipment, Helpful and Interstate file financing statements, with Interstate fil­ing first. In that cir­cum­stance, the party with priority to the equipment is

 

a. GLC.

b. Helpful and Interstate proportionately.

               c. Helpful only.

d. Interstate only.


                13.  Expert Capital Company and First National Bank are secured parties with security interests in property owned by Grande Corpora­tion. Between these security interests, the first to be filed or perfected has prior­ity over other filed or per­fected security interests in

 

a. most circumstances.

b. no circumstances.

c. states that have not adopted Article 9 of the UCC.

d. states that require a security agreement to be signed and dated by the creditor.


14.  Quotient Financial Corporation is a secured party with a security interest in property owned by Retail Sales Company. Perfection of this security in­ter­est may not protect Quotient Financial against the claim of

 

a. a bank.

b. a buyer in the ordinary course of business.

c. a subsequent lien creditor.

d. a trustee in bankruptcy.


15.  Elias repays his debt, incurred to buy consumer goods, to First City Bank and immediately files a written request for a termination state­ment. First City

 

a. must comply within one month of receipt of the letter.

b. must comply within twenty days of receipt of the letter.

c. must refund $500 to Elias.

d. need not comply.


 

16. Khalil holds a security interest in inventory owned by Luc. Khalil assigns his interest in the inventory to Mal. Mal becomes the secured party of record

 

a. automatically.

b. if Khalil advises Luc of the assignment.

c. if Mal advises Luc of the assignment.

d. if Mal files a uniform amendment form.


 

17. Ron does not make a payment on his car loan for several months. The dealer, Star Auto, repossesses the car by towing it from a public parking lot. Ron sues Star for breach of the peace. Ron will probably

 

a. prevail, because Ron has not formally defaulted on the car loan.

b. prevail, because the car was parked in a public lot when it was towed.

c. not prevail, because the repossession was not a breach of the peace.

d. not prevail, because a creditor can repossess property in which it holds an interest if no threats or force are used against a debtor.


 

18. Computer World (CW), after repossessing a multimedia system from Dave, a consumer, decides to keep the system instead of reselling it. CW sends written notice to Dave. CW can now keep the system

 

a. only after attempting an unsuccessful public sale of the system.

b. only after notifying any other appropriate secured party.

c. unless Dave objects.

d. under any circumstances.


 

19.  Hal’s Hardware store defaults on a debt to Intrastate Bank, which takes possession of the collateral securing the debt. Intrastate sells the collat­eral. The proceeds from the sale are applied first to

 

a. Hal’s debt to Intrastate.

b. Hal’s debts to other creditors.

c. Intrastate’s fees for the sale.

d. payments Hal’s made on the debt to Intrastate.


 

20. Green Landscape Company buys a backhoe on credit from Heavy Equipment Corporation, but does not make a payment on the loan for sev­eral months. Heavy repossesses the backhoe by towing it from a pub­lic street. Green sues Heavy for breach of the peace. Green will probably

 

a. not prevail, because Heavy did not use judicial process.

b. not prevail, because the repossession was not a breach of the peace.

c. prevail, because Green did not default on the loan.

d. prevail, because the repossession was a breach of the peace.


 

 

 

 

 

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