V. ANSWERS TO PROBLEMS AND PROBLEM
CASES:
1. Grinnel Brothers can argue that the drums were “consumer goods” and therefore
exempted
from the filing requirements of 9-401 by 9-302. While this argument might have merit in
many situations, here the purchaser of the goods was a professional musician. He earned
a
2. Yes. The sales ticket constitutes a valid security agreement which result in Sears having
an
enforceable security interest in the camcorder. Section 9-203 provides in pertinent
part:
(1) a security interest is not enforceable against the debtor or third parties with respect to
the
collateral and does not attach unless
…
3. No. The court found that the computer items were purchased primarily for use in
business
rather than for personal, family, or household purposes. Accordingly, the creditor
was
4. Yes. The sale by
Goldblatt’s
to Allegretti created a purchase money security interest
because
Goldblatt’s,
the seller of the collateral, retained a security interest to secure the balance of
the
5. Yes. ITT had a purchase money security interest in the motorcycles that attached and
was
perfected before Union Bank gained a security interest in them. ITT had a purchase
money
security interest in the motorcycles because its money was used to acquire the
motorcycles.
6. Firestone had the best right to the cash register. Firestone had a perfected security interest
in
Carroll’s equipment and fixtures, including any after-acquired property. The cash register
was
after-acquired equipment and was covered by Firestone’s security agreement and
financing
statement. National Cash Register failed to protect its interest in the cash register. To do so,
it
7. No. The court held that Grimes was a buyer in the ordinary course of business. As
such,
Grimes bought the car free of Sterling
Acceptance’s
security interest. The court said that
a
creditor with a security interest in the debtor’s inventory expected the debtor to make
sales
8. ACM’s lien has priority. SCM has a common law lien because it furnished services
and
materials that were incorporated into the car. Under the Code, a common law lien
has
29-8
©
2013 by McGraw-Hill Education.
This is
proprietary material solely
for
authorized instructor use. Not authorized
for
sale
or
distribution
in
any
manner. This document may
not
be copied, scanned, duplicated, forwarded, distributed,
or
posted
on a
website,
in
whole
or
part.
9. No. Despite the prior threat of violence, the repossession took place without any contact
or
confrontation between the repossessor and the debtor at the time of repossession. A
month
10. Gibson can recover a total of $883. This is the difference between the total reasonable
value
of the articles and the amount he owed on the loans. Hagberg violated the provisions
of9-
507 by failing to provide notice to Gibson as required by 9-504(3). This type of jewelry
was
29-9
©
2013 by McGraw-Hill Education. This
is
proprietary material solely
for
authorized instructor use.
Not
authorized
for
sale
or
distribution
in
any
manner. This document may
not
be copied, scanned, duplicated, forwarded, distributed,
or
posted
on a
website,
in
whole
or
part.