Question

Used Car Problems. ABC Motors sold a used car to Frank, who wrote a bad check for the car and left town but not before he sold the car to Betty, who paid $1,100 (a fair price for the car) believing that Frank had all rights to sell it. ABC Motors asked Frank to return the car, but he told them that he already sold it to Betty. What kind of title did Frank have?

Answer 1

Answer:

Frank had a voidable title, since he committed fraud by paying for the car with a bad check.

Explanation:

A voidable title is a title that can be voided by the grantee (ABC Motors) but is a valid title until voided. The grantee can void the title if some irregularity occurred during the transaction, e.g. fraud by paying with a bad check.

But the title passed to Betty is a good title, since she was an innocent good faith buyer and when she purchased the car the title had not been voided.

Answer 2

Answer: encumbrance title

Encumbrance is a claim against a property by a party that is not the owner.

Hopefully this helped