Subject: Business Law Read the case below and answer the questions that follow. Marie wanted to refurnish
Question:
Subject: Business Law
Read the case below and answer the questions that follow.
Marie wanted to refurnish her home. She asked her friend Lou if she could borrow some money. Lou agreed and Marie signed a loan for $6,000. The loan stated that Marie would pay back the money over a four-year period at an interest rate of 7 percent. The loan also contained a clause that stated if Marie did not pay the note on time, then Lou would be given title to her camper. Marie also bought big screen television from Buy Guy, an electronics retailer. The purchase required her to sign a document that stated she pay for the television in 12 monthly installments at 4 percent interest.
1. If Buy Guy wanted to perfect its security interest in the television, what would they have to do?
File a UCC-1 filing statement.
Take possession of the television.
It cannot be perfected.
Foreclose on the television.
Nothing, it is automatically perfected as a purchase money security interest.
2. If Lou wanted to get a higher priority against competing security interests in the claim to the camper if Marie defaults on the loan, which of the following would he want to do the security interest?
Claim it
Use it as a floating lien
Use it as a true lease
Perfect it
Make it a purchase money security interest
3. If Lou wanted to perfect his interest in the camper, which of the following could he do?
I. Take possession of the camper.
II. File a UCC-1 Financing Statement.
III. Create a purchase-money security interest.
I only
III only
II and III
I and II
I, II and III
4. The document that Marie signed for the television is which of the following?
Collateral
Chattel paper
Perfection
A warranty
A purchase-money security interest
5. The camper is which of the following?
Chattel paper
Perfection
Collateral
Warranty
A purchase-money security interest
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts