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Question: Case Facts: Steven Light bought a $55,050 wedding ring for his wife, Sherri Light, on credit from Royal Jewelers, Inc., a store in Fargo, North Dakota. The receipt granted Royal a security interest in the ring. Later, Royal assigned its interest to GRB Financial Corp. Steven and GRB signed a modification agreement changing the repayment terms. An attached exhibit listed the items pledged as security for the modification including the ring. Steven did not separately sign the exhibit. – Free Chegg Question Answer

Case Facts: Steven Light bought a $55,050 wedding ring for his wife, Sherri Light, on credit from Royal Jewelers, Inc., a store in Fargo, North Dakota. The receipt granted Royal a security interest in the ring. Later, Royal assigned its interest to GRB Financial Corp. Steven and GRB signed a modification agreement changing the repayment terms. An attached exhibit listed the items pledged as security for the modification including the ring. Steven did not separately sign the exhibit.

A year later, Steven died. Royal and GRB filed a suit in North Dakota state court against Sherri, alleging that GRB had a valid security interest in the ring. Sherri cited UCC 9-203, under which there is an enforceable interest only if “the debtor has authenticated a security agreement that provides a description of the collateral.” Sherri argued that the modification agreement did not “properly authenticate” the description of the collateral, including the ring, because Steven had not signed the attached exhibit. The court issued a judgment in GRB’s favor. Sherri appealed.

Issue: Was GRB’s security interest in the ring valid and enforceable?

Decision: Yes. The North Dakota Supreme Court affirmed the lower court’s judgement

Do you agree or disagree with the decision that was made by the courts? Why or why not?

Why do you think Sherri felt that she was able to appeal? Was her decision impractical? Why?

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Yes I agree with the decision of court because when Steven brought the ring it clearly granted Royal Jewellers the security interest in the ring with the receipt as an evidence which Royal jewellers later directed to GRB. Since it is clearly stated that Steven and GRB signed a modification agreement for changing the repayment terms and attached exhibit listing the items pledged as security for the modification including the ring thus GRB unambiguously has a security interest in the firm as the exhibit being listed in repayment terms was a part of the agreement which made the security interest valid and enforceable.

Sheri felt that she was able to appeal majorly because the exhibit listing items which were pledged as security for the modification including the ring was not separately signed by Steven which made sherri to question the authenticity of GRB’s security interest in the ring. In my opinion her decision to appeal based on the exhibit which was not separately signed , was not totally impractical because Steven’s modification agreement which included changing of repayment terms did not explicitly listed the items , so ambiguity on part of sherri was not impractical as she argued that it did not properly authenticate the term.

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Thanks dear student.. Hope I explained well. Good luck and God bless 🙂


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