Question

Marina Inc. sells and services sailboats. On April 1, Marina financed the purchase of its entire inventory with ACE Finance Company. ACE required Marina to execute a security agreement and a UCC-1 financing statement covering the inventory and proceeds. On April 4, ACE properly filed the UCC-1 Financing Statement covering the inventory, proceeds and after-acquired inventory. On April 27, Marina sold one of the sailboats to Wally for use in his charter business for $100,000 ($50,000 cash and $50,000 on credit). Wally, who had once worked for Marina, knew that Marina regularly financed its inventory with ACE. Marina defaults on its obligations to ACE. The motor purchased by Wally isSubject to the GAC security interest because Wally should have known that GAC financed the inventory purchase by MarinaSubject to the GAC security interest because Wally purchased the motor for a commercial use.Not subject to the GAC security interest because Wally is regarded as a buyer in the ordinary course of Marina’s business.Not subject to the GAC security interest because GAC failed to file the financing statement until more than 10 days after April 1.

Answer 1

Answer:Not subject to the GAC security interest because Wally is regarded as a buyer in the ordinary course of Marina business.

Exlanation:

Since Marina is in sales of inventory in the normal course of business Wally transaction is simply a sales of good Contract.