Question: When a customer opens a credit-card account with Sears, Roebuck & Co., the customer fills out an application and sends it to Sears for review;

When a customer opens a credit-card account with Sears, Roebuck & Co., the customer fills out an application and sends it to Sears for review; if the application is approved, the customer receives a Sears card. The application contains a security agreement, a copy of which is also sent with the card. When a customer buys an item using the card, the customer signs a sales receipt that describes the merchandise and contains language granting Sears a purchase-money security interest (PMSI) in the merchandise. Dayna Conry bought a variety of consumer goods from Sears on her card. When she did not make payments on her account, Sears filed a suit against her in an Illinois state court to repossess the goods. Conry filed for bankruptcy and was granted a discharge. Sears then filed a suit against her to obtain possession of the goods through its PMSI, but it could not find Conry’s credit-card application to offer into evidence. Is a signed Sears sales receipt sufficient proof of its security interest? In whose favor should the court rule? Explain.


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