Pine has a security interest in certain goods purchased by Byron on an installment contract.  Byron has defaulted on the payments, resulting in Pine’s taking possession of the collateral. Which of the following is correct?
 
A. The collateral may be sold by Pine at a private sale and, if the collateral is consumer goods, without notice to other secured parties.
 
B. Pine must sell the collateral if Byron has paid more than 60% of the cash price on a purchase money security interest in business equipment.
 
C. Unless otherwise agreed, Pine must pay Byron for any increase in value of the collateral while the collateral is in Pine’s possession.
 
D. Byron may waive his right of redemption at the time he executes the security agreement.
 
Answer:A
 
A is corrent. If the collateral is consumer goods, Pine may sell the collateral at a private sale without notice to other secured parties. However, Pine must notify the debtor before the sale unless the collateral is perishable or threatens to decline in value.
 
B is incorrect. Pine only has the option of selling the collateral if the debtor has paid 60% of the cash price on a purchase money security interest in consumer goods, not business equipment. Since the collateral is equipment, Pine would still have the option of keeping the collateral as full payment of the obligation if, after giving written notice to Byron of this desire, Byron did not object within 21 days.
 
C is incorrect. Pine may keep the increase in value of the collateral as additional security unless actual money is received by Pine, in which case the secured party must give it to the debtor or apply the amount to the obligation.
 
D is incorrect. The debtor may not waive his right of redemption at the time the debtor executes the security agreement. The debtor has the right to reclaim the collateral if the debtor tenders payment of the entire debt and the secured party’s reasonable expenses.

 
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