How Security Interests are Created Conditional Sales

Question

How Security Interests are Created Conditional Sales?

Answer 1

In a conditional sale, title is not transferred to the buyer until he or she has completed a series of instalment payments. While the buyer has possession of the goods, the seller's retention of ownership provides full security since the seller may either sue for the unpaid balance, or repossess the goods and resell them. (An Ontario seller may then also sue for any deficiency between the amount owing and the sale price.) Ontario allows for an acceleration clause in a conditional sales contract, whereby the buyer must pay the whole balance owing upon default. An assignee of a seller under a conditional sales contract gets the same rights as the seller.