Scenario On May 23 Mark went to his local dealership and bou

Scenario:

On May 23, Mark went to his local dealership and bought a pickup that he found on the lot. On that day, he paid a $1,000 deposit to hold the truck until he secured financing. Later that same day, Mark signed a bank note which provided the remainder of the purchase price of the pickup. He was able to go to the dealership to pick up his new truck on May 27. On May 30, the bank filed the security agreement. On what date did the bank\'s security interest attach? How did you come to that conclusion?

Solution

Bank\'s security interest starts from the day bank filed the security agreement. Reason is that even if Mark signs the agreement witht the Bank, money was not transffered at the same moment. It was still with bank and hence bank cannot charge interest on that. However as soon as bank paid to the dealer, it symbolizes that money has been accepted by Mark and hence the interest starts, 30th May in this case.