Exam 16: Priority of Creditors

"The main purpose of security is to provide some recourse to the person claiming to be paid,if some dispute arises about the quality of the performance of the contract." Discuss the accuracy of this statement.

What is a bankruptcy offence? Give an example.

With regard to negotiable instruments,which of the following is false?

What is the effect of a payment made in preference to one creditor over another?

Which one of the following is false with respect to the Builders' Lien Act?

Last night at the dinner table,Uncle Isaac started on again about his company buying a truck on time.Which of these statements by his friends is false with regard to conditional sales contracts?

Explain how the rights of the creditors are protected under bankruptcy legislation.

A company in the delivery business bought a $29 000 truck under a conditional sale contract.Because of business reverses they are now unable to make the payments.Which of the following is accurate with respect to the legal position of the parties?

Where,in the face of default,goods are repossessed and resold,but the amount recovered is not enough to cover what is owing,what are the rights of the creditor?

Explain what is meant by a "chose in action."

Where a debtor has defaulted and the creditor,under the Personal Property Security Act,repossesses and resells the goods,what is his obligation with respect to overages or underages?

The Bankruptcy and Insolvency Act allows a supplier of goods to a bankrupt to seek return of those goods.

Nick has a consulting business with monthly billings of $4,00.He rents his office,hardware,and furniture and owns few assets.Nick rents his apartment,has no car,and spends most of his income on leisure.If he came to you,a bank manager,and asked to borrow $10 000 for the purpose of increasing his working capital,which of the following securities would you most likely request?

Settlements involve the transfer of assets for nominal or no consideration.

After some careful research,Susan decided what kind of car to buy.She made an offer to Mr.Frank,a private party,to buy his car only after searching the registry for any liens.The registry reported that there were no liens registered against the vehicle.The seller accepted her offer of $8000.After Susan had had the car for only three weeks,the car was seized by a conditional seller.Which of the following is true?

They couldn't remember exactly how it happened,but the Mauris ended up a three-computer family with the consequent mess of books and papers in three different rooms.Mr.Mauri hired a general contractor,Mr.Wip,to build a "computer room." Wip had several qualified workers but still sub-contracted with an electrician and a carpenter.The work went well.Mauri held back 10 percent,but paid out 90 percent in good faith; i.e.,when he paid,there were no complaints or liens filed.It turned out,however,that before any of the workers had completed their work-and no one expected payment until the job was finished-Wip disappeared with the money.Given these facts,which of the following is true?

Discuss the bankruptcy and insolvency process from the point of view of the creditor,indicating how that creditor's interests are or are not protected.

"Joe bought a car from Harry's Fine Cars on time under a conditional sale agreement.It ran fine for a while,then he had a series of problems with it that made Joe regret ever entering into the transaction.Joe simply stopped paying,knowing that the only thing that Harry could do was repossess the goods." Explain the accuracy of the final statement.

Why is the distinction between a guarantee and an indemnity important?

A purchase money security interest