Asked by la douce Fleur on Jul 19, 2024
Verified
Wen purchased an automobile from Nick for $10,000. Unknown to Wen, Nick had used the automobile as security for a loan from his bank, and the bank had registered its security interest in the automobile under the provincial personal property security registration legislation. A few months after the sale, Nick defaulted on the loan, and the bank discovered that Wen was in possession of the automobile. Nick is liable to Wen for breach of warranty of title, if the bank should seize the automobile.
Warranty Of Title
A guarantee provided by a seller to a buyer that they legally own the item being sold and have the right to sell it, free from any claims by others.
Security Interest
A legal claim or lien on property, both real and personal, granted to secure the performance of an obligation, often the repayment of a loan.
Provincial Personal Property
Property, excluding real estate, owned by individuals or entities within a specific province.
- Investigate the consequences of personal property security registration on secured dealings.
- Acquire insight into the effects of secured transactions concerning bona fide buyers for consideration.
Verified Answer
GZ
Gabrielle ZepnickJul 21, 2024
Final Answer :
True
Explanation :
When Nick sold the automobile to Wen without disclosing the existing security interest held by the bank, he breached the warranty of title, which implies that the seller has the right to sell the property and that it is free from any undisclosed security interests or liens.
Learning Objectives
- Investigate the consequences of personal property security registration on secured dealings.
- Acquire insight into the effects of secured transactions concerning bona fide buyers for consideration.