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Hughes Carr, a car dealership, sells Victor E . Lapp an Audi. As Victor is leaving the showroom, Victor is informed that Hughes is in
Hughes Carr, a car dealership, sells Victor E Lapp an Audi. As Victor is leaving the showroom, Victor is informed that Hughes is in default on a loan and that his lender is going to enforce its security interest including seizing the Audi Victor purchased. The likely outcome is which of the following?
Because the Audi was sold in the ordinary course of business, even if Victor was aware of the lender's security interest, he may keep the Audi free and clear of the lender's security interest.
Victor and Hughes are jointly and severally liable for the portion of Hughes' defaulted loan attributable to the Audi.
Victor cannot keep the Audi free and clear of the security interest because he was aware of it
Assuming Victor takes the car, Hughes' lender can repossess the Audi from Victor.
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