Essay on secured transactions:

1.On September 1, Abco Electronics Co. sold a computer from out of its inventory to Rice who intended to use it for business purposes.Rice paid 25% of the purchase price and executed and delivered to Abco a promissory note for the balance.A security agreement was signed only by the Abco sales representative.Abco failed to file a financing statement. Rice is in default under the promissory note. Rice claimed that Abco does not have an effective security interest in the computer because Rice did not authenticate the security agreement, and because Abco did not file a financing statement.

State whether the claims of Rice are correct and give the reasons for your conclusions.

2.Wine purchased a computer using the proceeds of a loan from MJC Finance Company.

Wine gave MJC a security interest in the computer. Wine executed a security agreement and financing statement, which was filled by MJC. Wine used the computer to monitor Wine's personal investments. Later, Wine sold the computer to Jacobs, for Jacob's family use. Jacobs was unaware of MJC's security interest. Wine is now in default under the MJC loan.

May MJC repossess the computer from Jacobs?Explain if your answer would change if MJC had not filed a financing statement and Jacobs bought the computer for business purposes.