Able Finance Corp Carries on a Lending Business in Saint

question 23

Multiple Choice

Able Finance Corp carries on a lending business in Saint John,New Brunswick.Athos Transport has asked Able to acquire a truck trailer and then lease it to Athos for five years in return for monthly payments which will cover the full amount of the purchase price plus 10 percent.At the end of the lease term,Athos has an option to buy the trailer for $100.Assuming that Able and Athos enter into this transaction,which of the following is TRUE? The New Brunswick Personal Property Security Act

• A)applies to this transaction because,in substance,it gives Able a security interest in the trailer.
• B)does not apply to this transaction because the form of the transaction is a lease.
• C)applies to this transaction because the lease is for a term exceeding one year.
• D)applies to this transaction because this lease is equivalent to secured bank financing.
• E)does not apply to this transaction because,under the lease,Able will have title to the trailer,not a security interest.

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Definitions:

Notification

The act of formally informing or giving notice to a party or authority about an event, action, or proceeding.

Automatically Terminate

The ending of an agreement, contract, or employment without the need for action by either party, often triggered by predetermined conditions.

Contractual Capacity

The legal ability of an individual or entity to enter into a contract, requiring an understanding of the terms and the ability to comprehend its obligations.

Promissory Estoppel

A doctrine under which a promise is binding if the promise is clear and definite, the promisee justifiably relies on the promise, the reliance is reasonable and substantial, and justice will be better served by enforcing the promise.