Which of the Following Best Describes Why Personal Property Security

question 6

Multiple Choice

Which of the following best describes why personal property security legislation requires that a secured party in possession of collateral act in a commercially reasonable way when disposing of it?

• A) Commercially reasonable behaviour is what parties expect in the marketplace.
• B) If there were no legal requirement, secured parties are likely to act in a way which is unreasonable.
• C) Secured parties are not in the business of disposing of the assets of their debtors and so need guidance as to how to do it.
• D) Secured parties are only interested in getting paid what they are owed plus their expenses associated with disposing of the collateral, not in obtaining the best price for the collateral.
• E) Secured parties must dispose of the collateral quickly to avoid having to pay others with claims against the debtor and so may not act in a commercially reasonable manner.

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Definitions:

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