Author Question: Privity of contract is not required in all states for a valid mechanics' lien. Indicate whether the ... (Read 133 times)

j.rubin

  • Hero Member
  • *****
  • Posts: 557
Privity of contract is not required in all states for a valid mechanics' lien.
  Indicate whether the statement is true or false

Question 2

Morris made two purchases. He purchased his neighbor Cordelia's typewriter and a computer from Crazy Computers. Regarding the typewriter, Cordelia had bought it on credit from Jack's Typewriters. Cordelia had financed the purchase with Jack's and signed a promissory note and a security agreement covering the purchase. The creditor, Jack's, did not file a financing statement, relying on the concept of automatic perfection for purchase money security interests in consumer goods. Morris was unaware of the history of the typewriter. The computer was subject to a security interest in favor of Country Bank, which had perfected its security interest by filing. Morris, by coincidence, knew of this security interest when Morris purchased the computer. Unfortunately, neither Cordelia nor Crazy Computers paid the secured creditors who now seek to repossess the collateral from Morris. What will be the likely outcome of this case?



tdewitt

  • Sr. Member
  • ****
  • Posts: 318
Answer to Question 1

TRUE

Answer to Question 2

Neither creditor will be successful. Regarding the typewriter, a purchase money security interest of consumer goods provides automatic perfection without filing a financing statement. However, if no filing statement is filed, resale to another consumer who does not know of the security interest will cause the interest to terminate. If Morris was buying as a consumer, the security interest has terminated. Morris will keep the computer free of the security interest of Country Bank because a buyer of inventory in the ordinary course of business is free from security interests placed on the goods by the seller, regardless of whether the buyer is aware of them.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Lower drug doses for elderly patients should be used first, with titrations of the dose as tolerated to prevent unwanted drug-related pharmacodynamic effects.

Did you know?

Medication errors are three times higher among children and infants than with adults.

Did you know?

Since 1988, the CDC has reported a 99% reduction in bacterial meningitis caused by Haemophilus influenzae, due to the introduction of the vaccine against it.

Did you know?

Approximately one in four people diagnosed with diabetes will develop foot problems. Of these, about one-third will require lower extremity amputation.

Did you know?

Tobacco depletes the body of vitamins A, C, and E, which can result in any of the following: dry hair, dry skin, dry eyes, poor growth, night blindness, abscesses, insomnia, fatigue, reproductive system problems, sinusitis, pneumonia, frequent respiratory problems, skin disorders, weight loss, rickets, osteomalacia, nervousness, muscle spasms, leg cramps, extremity numbness, bone malformations, decayed teeth, difficulty in walking, irritability, restlessness, profuse sweating, increased uric acid (gout), joint damage, damaged red blood cells, destruction of nerves, infertility, miscarriage, and many types of cancer.

For a complete list of videos, visit our video library