Question 1

Explain what is meant by the term "financing leases."

Accepted Answer

The answer of Explain what is meant by the term...

Question 2

Does a bank have a right of lien against property left in its safekeeping by one of its borrowers?

Accepted Answer

The answer of Does a bank have a right of...

Question 3

What is "perfection" of a secured interest under personal property security legislation? Why is "perfection" relevant to the rights of a secured lender?

Accepted Answer

The answer of What is "perfection" of a secured interest...

Question 4

Which of the following is NOT included in the categories of persons to whom a bank may loan money under the Bank Act?

Accepted Answer

A) doctors 
B) farmers 
C) fishermen 
D) manufacturers 
E) aquaculturalists

Question 5

If an owner sells you goods that have been pledged as security for a loan,the claim against those goods is known as

Accepted Answer

A) a contract pledge. 
B) a secured transaction. 
C) security interest. 
D) creditor interests. 
E) collateral.

Question 6

Phillip,who has a loan on his car at the bank,has placed his car on consignment at the local used car lot.His law professor tells Phillip that consignments can amount to a secured type of credit.If this is TRUE,who is the creditor?

Accepted Answer

A) the consignor 
B) nobody,because in this case,the professor is wrong 
C) the next purchaser of the car 
D) the consignee 
E) the bank

Question 7

Each of the following may create consensual security interests EXCEPT

Accepted Answer

A) guarantees. 
B) leases. 
C) liens. 
D) consignments. 
E) accounts receivable.

Question 8

A prudent creditor who has entered into a chattel mortgage will always conduct a search of title in the local land titles office.

Accepted Answer

A) True 
 B)False

Question 9

Where security devices are agreed to in advance as terms in the contract,they are often called

Accepted Answer

A) non-consensual security interests. 
B) collateral security. 
C) consensual security interests. 
D) the pledge of assets. 
E) the creditor back-up system.

Question 10

Where a bank gives a loan,taking back and perfecting security under section 147 of the Bank Act,why is registration under provincial personal property security legislation a prudent practice?

Accepted Answer

The answer of Where a bank gives a loan,taking back...

Question 11

Which one of the following requires permission from the security holder before the item(s)used as collateral can be sold?

Accepted Answer

A) chattel mortgage 
B) pledge 
C) real estate mortgage 
D) stock-in-trade 
E) floating charges

Question 12

A mortgage on land gives the mortgagee security in the land in priority over other secured interests registered under provincial PPSA legislation.

Accepted Answer

A) True 
 B)False

Question 13

A,a manufacturer,enters into a conditional sales agreement with B,a retail seller of goods,under which A supplies 100 amplifiers to B.The manufacturer registers the agreement under provincial PPSA legislation.B now sells one amplifier to C and a few days later defaults on the conditional sales agreement.In this case,the manufacturer

Accepted Answer

A) can both sue C for the value of the amplifier and retake possession of it from C. 
B) can only retake possession of the amplifier from C. 
C) can only sue C for the value of the amplifier. 
D) can only look to B and its security agreement. 
E) none of the above

Question 14

An unsecured creditor is no different from a creditor who fails to register a security interest under provincial PPSA legislation.

Accepted Answer

A) True 
 B)False

Question 15

Sonny bought a computer from The Bad Guys on a conditional sales contract.Two months later Sonny sold the computer to Fred without mentioning it was not paid for.Can The Bad Guys recover the computer from Fred?

Accepted Answer

A) No,they cannot,provided Fred is an innocent third party. 
B) No,they cannot,since this is a consumer transaction where title is guaranteed. 
C) Yes,they can,but it would be easier for them to get the money from Sonny. 
D) Yes,they can,if the security device is properly registered with the province. 
E) Yes,they can directly from Fred,or they can force Sonny to retrieve the computer.

Question 16

At common law,a bona fide purchaser for value without notice acquires ownership in goods from a seller who appears to own them,but does not.

Accepted Answer

A) True 
 B)False

Question 17

How is it that security devices mislead innocent third parties?

Accepted Answer

The answer of How is it that security devices mislead...

Question 18

Self-liquidating financing is usually the best form of financing for farmers.

Accepted Answer

A) True 
 B)False

Question 19

Financial assets and investment property receive special treatment under personal property security legislation.Investment property includes all of the following EXCEPT

Accepted Answer

A) shares. 
B) bonds. 
C) securities accounts (where a dealer,broker or bank holds financial assets in an investment account on behalf of the investor). 
D) future accounts. 
E) deeds to real property.

Question 20

What advantage does a secured creditor have over an unsecured creditor when they both are forced to collect an overdue account?

Accepted Answer

The answer of What advantage does a secured creditor have...

Exam 28: Secured Transactions

Explain what is meant by the term "financing leases."

Does a bank have a right of lien against property left in its safekeeping by one of its borrowers?

What is "perfection" of a secured interest under personal property security legislation? Why is "perfection" relevant to the rights of a secured lender?

Which of the following is NOT included in the categories of persons to whom a bank may loan money under the Bank Act?

If an owner sells you goods that have been pledged as security for a loan,the claim against those goods is known as

Phillip,who has a loan on his car at the bank,has placed his car on consignment at the local used car lot.His law professor tells Phillip that consignments can amount to a secured type of credit.If this is TRUE,who is the creditor?

Each of the following may create consensual security interests EXCEPT

A prudent creditor who has entered into a chattel mortgage will always conduct a search of title in the local land titles office.

Where security devices are agreed to in advance as terms in the contract,they are often called

Where a bank gives a loan,taking back and perfecting security under section 147 of the Bank Act,why is registration under provincial personal property security legislation a prudent practice?

Which one of the following requires permission from the security holder before the item(s) used as collateral can be sold?

A mortgage on land gives the mortgagee security in the land in priority over other secured interests registered under provincial PPSA legislation.

An unsecured creditor is no different from a creditor who fails to register a security interest under provincial PPSA legislation.

Sonny bought a computer from The Bad Guys on a conditional sales contract.Two months later Sonny sold the computer to Fred without mentioning it was not paid for.Can The Bad Guys recover the computer from Fred?

At common law,a bona fide purchaser for value without notice acquires ownership in goods from a seller who appears to own them,but does not.

How is it that security devices mislead innocent third parties?

Self-liquidating financing is usually the best form of financing for farmers.

Financial assets and investment property receive special treatment under personal property security legislation.Investment property includes all of the following EXCEPT

What advantage does a secured creditor have over an unsecured creditor when they both are forced to collect an overdue account?