Assume you are the creditor in each of the following situations. Identify the kind of security agreement that is involved in each transaction and explain how you would perfect that agreement
a. You are the creditor (Everby Bank), and you lend Brisco Gaines $5,000 for a sound system.
b. First Bank loans Doris $10,000 to purchase inventory for her store.
c. First Bank loans Brad $5,000 to purchase a computer network for use in his store office.
d. Kevin needs cash for gambling debts. He brings in his high-definition TV to secure a $500 loan.
a . This is a purchase money security interest in consumer goods. It is automatically perfected, although Everby Bank may wish to ensure its priority locally over other potential creditors by filing a financing statement.
b. This is a purchase money security interest in inventory. It probably includes a "continuing general lien," which is also called a "floating lien" on the after-acquired inventory that Doris purchases. It is perfected by filing in a central location designated by the state.
c. This is a purchase money security interest in equipment. Filing in a central location designated by the state perfects.
d. This is a pledge of consumer goods. Since delivery has been made, no filing is necessary and the security interest is perfected by reason of the secured party's possession of the collateral.
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