Which of the Following Best Describes Why Personal Property Security

question 72

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.

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Definitions:

Title Pass

The transfer of ownership of a property or an asset from one party to another, usually occurring upon the fulfillment of agreed conditions.

Time and Place

Contextual factors referring to when and where an event occurs, which can significantly affect the nature or interpretation of the event.

Buyer's Expense

Costs that are borne by the purchaser of goods or services, including but not limited to, shipping, taxes, and any other charges associated with the purchase.

Alongside the Ship

A term used in shipping to describe a situation where goods are positioned next to a vessel, ready to be loaded or having been unloaded, essentially indicating they are at the place of transfer.