Which of the Following Best Describes Why Personal Property Security

question 49

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)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.
• B)If there were no legal requirement, secured parties are likely to act in a way which is unreasonable.
• C)Secured parties are generally only interested in getting paid what they are owed plus their expenses associated with disposing of the collateral and not necessarily in obtaining the best price for the collateral.
• D)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.
• E)Commercially reasonable behaviour is what parties expect in the marketplace.