Contracts

Question 1

For a security interest to attach the following must be present

Answer 1

1) Debt obligation 2) Security agreement or possession of the collateral by the debtor 3) Debtor must have interest in property

Question 2

When is security interest attached

Answer 2

When the inventory is “identified” (Shipped marked or otherwise designated)

Question 3

Method of perfecting security interest (4)

Answer 3

1) Filing 2) Possession 3) Automatic 4) Temporary

Question 4

How to have automatic perfection (3)

Answer 4

1) PMSI 2) Consumer not PMSI in inventory and equipment 3) Proceeds

Question 5

What is PMSI

Answer 5

Creditor is advancing funds for the purchase of collateral

Question 6

Define contribution in terms of suretyship

Answer 6

A right a co-surety has against another

Question 7

Define subrogation in terms of suretyhip

Answer 7

Right of surety after they pay

Question 8

Define exoneration in terms of suretyship

Answer 8

Rights of surety to force principal debtor to pay

Question 9

Define reimbursement in terms of suretyship

Answer 9

Right of surety to collect from principal debtor

Question 10

When is specific performance used

Answer 10

When money damages won’t suffice as when the subject of the contract is unique or rare

Question 11

When is the parol evidence rule used and what do you need

Answer 11

For prior statements and you need a complete contract

Question 12

Any contract that is > 1 year

Answer 12

Has to be in writing

Question 13

Any sale of goods > $500

Answer 13

Has to be in writing

Question 14

If a debtor doesn’t pay what two things occur with having a security interest

Answer 14

1) Suit or repossession 2) No court proceeding is required before repossession

Question 15

What rule applies when the creditor attempts to sell debtors collateral

Answer 15

60% rule of cash price of collateral. The creditor has to sell the collateral if suggested by debtor