On November 10, Cutter, a dealer, purchased 100 lawnmowers. This comprised Cutter's entire inventory and was financed under an agreement with Town Bank which gave the bank a security interest in all lawnmowers on the premises, all future acquired lawnmowers, and the proceeds of sales. On November 15, Town Bank filed a financing statement that adequately identified the collateral. On December 20, Cutter sold one lawnmower to Wills for family use and five lawnmowers to Black for its gardening business. Which of the following is correct?
A. Town's security interest may not cover after-acquired property even if the parties so agree.
B. The lawnmower sold to Wills would not ordinarily continue to be subject to Town's security interest.
C. The lawnmowers sold to Black would ordinarily continue to be subject to Town's security interest.
D. Town's security interest does not include the proceeds from the sale of the lawnmowers to Black.
B. The lawnmower sold to Wills would not ordinarily continue to be subject to Town's security interest.
You might also like to view...
The SEC makes it mandatory for companies to disclose their dividend policy in their annual reports
a. true b. false
A California real estate broker finds a buyer for a property in Reno listed with a Nevada broker. Per California regulations the:
a. California broker cannot be paid a commission b. Nevada broker cannot sell to a California buyer in Nevada c. commission can be divided per agreement between the brokers d. California broker must first obtain a Nevada real estate license