Refer to Fact Pattern 39-1

question 43

Multiple Choice

Refer to Fact Pattern 39-1. Suppose that the premises occupied by Unique are destroyed by flood. Under most state laws, Trends

• A) has to continue to pay rent until the end of the lease term.
• B) has to pay a part of the rent and Unique has to pay the other part since it is still in business.
• C) does not have to pay the rent.
• D) will be reimbursed by Stores & Shops for any rent already paid because the property was not fit for use.

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Definitions:

Secured Parties

Creditors or lenders who have a secured interest in a borrower's collateral to secure repayment of the loan.

Secured Creditor

A lender or creditor who has a legal right to seize collateral if the borrower fails to repay the debt as agreed.

After-Acquired Inventory

Inventory obtained by a company after it has granted a security interest in its inventory to a creditor, which may also fall under the security interest for that creditor.

Financing Statement

A document filed to give public notice of a secured transaction, thereby establishing a lender's security interest in the borrower's collateral.