Please reply to the below debate
1) Bridgeport Auto needs to file a financing statement to perfect its security interest to finance the sale of the new Toyota 4-Runner to Barton. In my opinion, the six iMacs should have a contract and a financing statement from KDM Electronics because they are not goods for personal use. The amount of money is not small. Maybe it is not mandatory in the state where Brighton Homes is located for this type of good. Still, it could protect KDM Electronics from any future loss for not a payment or another eventuality (Miller, Frederick H 2003).
2) KDM electronics had four months to amend the filing of the financing statement, but according to the case, Barton defaulted six months later, and it was late to change de debtor’s name. On the other hand, Brington Homes could be a sole proprietorship, a partnership, LLC or S-Corporation, and each one has different levels of liabilities. The retailer in this case only can sue Brington Homes, no directly to the owner. Also, Brington Homes could be only the debtor’s trade name, and it would not be sufficient for perfection [UCC 9–503(c)] (Legal Information Institute, Cornell Law School. n.d.).
3) Because Barton bought all of these items under installment sales contracts, the surround-sound system, the kayak, and the Toyota 4-Runner would qualify as a PMSI in consumer goods. In the case of the Toyota 4-Runner, some additional steps are needed, such as filing the respective financing statement to the State, unlike the other two goods.
4) The surround-sound system sales was perfected automatically by attachment, thus KDM Electronics retains a security interest in the good until full payment has been made; therefore it can recover the unpaid good to keep or re-sale it as an inventory to compensate the credit defaulted.
A debtor can be a person, a corporation, a trustee, or an organization; therefore, it is essential to have the exact name to avoid mistakes identifying the correct borrower or buyer. But I think in the United States exists other things that can help identify a debtor more than a name. It is the case of the EIN’s for entities and the driver’s license number for individuals. The seller or lender should request those official documents from the borrower or buyer to identify or link companies or individuals in the secretary office of the states; obviously, the Social Security number is not advisable in these cases for security reasons.
It is unfair for lenders or sellers to fail to obtain their money or goods back due to mistakes only on the name filed. For that reason, they must use official documents of identification to fill out and send the financing statement to the government office using proper EINs and driver license numbers as a counterpart in case of type error or minor error in the name. All sellers of expensive goods such as cars and boats have access to state websites. For example, in Florida, through Sunbiz.org, they can access the Company information completely, with the EINs and owner’s names.
Miller, Frederick H (2003). Sales and leases of goods in a nutshell: with brief discussion of letter of credit, documents of title, and the Uniform Computer Information Transactions Act.
LII / Legal Information Institute. n.d. § 9-503. NAME OF DEBTOR AND SECURED PARTY.. [online] Available at: <https://www.law.cornell.edu/ucc/9/9-503> [Accessed 13 May 2021].
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