On March 17, 2021, Ben sold a $7,000 machine to Dennis on credit. Dennis will use the machine to produce chemicals used in VirusClean, a cleaning product that he sells to eliminate viruses, including the coronavirus. As part of the deal, Dennis signed an installment note payable to Ben and a security agreement giving Ben a security interest in the machine. Ben delivered the machine to Dennis but never filed a financing statement in the public records.

Dennis used the machine for two months to make chemicals for VirusClean. As of May 17, 2021, he has $4,000 of chemicals in his business inventory. Also, Dennis sold $5,000 of VirusClean products to the Marriott Corporation, a large hotel chain. The Marriott has not used these products yet to clean any hotel rooms, and Marriott still has them in a warehouse in northern California. Marriott orally agreed to purchase these chemicals in a telephone call with Dennis and, because Marriott is a large company, Dennis did not perform a credit check on Marriott or do any paperwork at all regarding this sale.

Dennis’s product, VirusClean, is an excellent cleaning and disinfecting product for most purposes. However, it does not successfully kill the Covid 19 virus. Marriott Corporation had told Dennis on June 1 that it wanted to buy this product because of its virus-killing properties and Dennis recommended it for that purpose. At that time, Dennis sincerely believed that it would kill the Covid 19 virus. He discovered later on, however, that it would not.

On April 17, 2021, Dennis fails to make an installment payment owed for the machine purchase. Ben is understandably upset.

6. Does Ben have an automatically perfected security interest in the VirusClean merchandise sold to Marriott? State “yes” or “no” and briefly state your reason.

7. Does Ben have the right to repossess the VirusClean merchandise held by Marriott at its warehouse? State “yes” or “no” and briefly state your reason.

8. If Marriott sues Dennis for breach of contract, Dennis plans to defend this lawsuit by claiming he made a unilateral mistake. Is Dennis’s defense likely to succeed? State “yes” or “no” and briefly state your reason.

9. If Marriott sues Dennis for breach of contract, Marriott plans to claim that Dennis is liable based on fraud. Is Marriott likely to succeed? State “yes” or “no” and briefly state your reason.

10. If Marriott sues Dennis for breach of contract, Marriott plans to claim that Dennis is liable based on the implied warranty of fitness for a particular purpose. Is Marriott likely to succeed? State “yes” or “no” and briefly state your reason.

11. If Marriott sues Dennis for breach of contract, Marriott plans to claim that Dennis is liable based on the implied warranty of merchantability. Is Marriott likely to succeed? State “yes” or “no” and briefly state your reason.

12. Assume that Ben has a perfected security interest in the VirusClean products that Dennis sold to Marriott. If Ben successfully repossesses from Marriott the VirusClean products held by Marriott, would Marriott likely succeed in a lawsuit against Dennis based on Dennis breaching the implied warranty of merchantability? State “yes” or “no” and briefly state your reason.