Sarah,a Public Servant,gave a Security Interest to Her Brother Peter

question 3

Multiple Choice

Sarah,a public servant,gave a security interest to her brother Peter in all her assets to secure her obligation to repay a loan from Peter.Peter filed a financing statement to register his interest.Subsequently,Joan bought some furniture from Sarah.Joan had no knowledge of Peter's security interest.Which of the following statements best describes Joan's legal position?

• A)Joan's interest in the furniture is subject to Peter's security interest.
• B)Joan's bought the furniture free of Peter's security interest because Sarah is not in the business of selling furniture.
• C)Joan bought the furniture free of Peter's security interest because security interests of close family relatives are not enforceable against third parties.
• D)Joan bought the furniture free of Peter's security interest because she had no notice of it.
• E)Joan is obliged to give the furniture to Peter.

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Definitions:

Fibrosis

A pathological process characterized by the accumulation of excess fibrous connective tissue in an organ or tissue.

Refractory Period

The period immediately following the transmission of an impulse in nerve or muscle cells during which a second impulse cannot be generated.

Tetanus

A serious bacterial infection characterized by muscle stiffness and spasms, caused by the toxin produced by Clostridium tetani.

Muscle Fiber

A single muscle cell, typically elongated and capable of contracting to produce movement or maintain posture.