Asked by Riley Lennon on Jun 22, 2024
Verified
Tom takes his car to be repaired at Smith Auto Garage.Tom was surprised at the total of the bill and refuses to pay the total of the work performed.Smith Auto Garage holds onto Tom's car based on a mechanic lien.Tom stops making payments on the car to Northshore Credit Union,which has a perfected security interest in Tom's car.Smith Auto Garage will get their full amount of their lien prior to Northshore Credit Union receiving funds from a sale of Tom's car.
Mechanic Lien
A legal claim against a property by a contractor or repairman for unpaid work, securing payment for services rendered.
Perfected Security
A security interest in a collateral that is legally binding and has been properly filed or registered, affording the creditor priority over other claimants.
- Acquire knowledge of the hierarchy principle in the context of security interests and the basic rules that determine creditor precedence.
Verified Answer
JO
jonah olivanJun 25, 2024
Final Answer :
True
Explanation :
UCC section 9-333 provides that mechanic's liens have priority over a perfected security interest in the collateral.
Learning Objectives
- Acquire knowledge of the hierarchy principle in the context of security interests and the basic rules that determine creditor precedence.
Related questions
The Basic Priority Rule for Competing Security Interests Is That ...
In a Dispute Between a Secured Perfected Creditor and a ...
In General,secured Parties Have Priority Over Unsecured Creditors
When a Debtor Sells Collateral,the Secured Party Automatically Has an ...
If Both First Bank and Second Bank Had Properly Perfected ...