(a)

      Virginia will construe all the agreements to be a single contract and it Virginia construe the contract pursuant to the rule that ambiguities in contracts are construed narrowly against the drafter, especially when the drafter is a commercial seller and the buyer is not. On these facts, the writing appears to convey the ownership rights of the car to Mary but with a security interest for CRAS, subjecet to the condition subsequent of CRAS being able to arrange financing for Mary. The ordinary meaning of the words appears to provide that Mary will own the car, but the car will serve as collateral for her subsequent loan payments. However, because a condition subsequent to the contract failed, CRAS was entitled to void the contract. Mary should be entitled to have her used car returned, as well as her $1000 down payment.

(b)

      Here, the CRAS is likely entitled to repossess the car becuase becuase a condition subsequent of the contract did not occur. Per the language of the contract, Mary only took possession of the car pending credit approval. If approval was obtained, she would become the owner of the car, subject to CRAS' security interest.

      A security interest is created by a writing that conveys the creditor a right in property that is conveyed to the debtor, that the debtor then takes rights in, and a public act. Here, the contracts create the agreement that give Maddie ownership subject to CRAS's interest, if the condition subsequent of financing was met. Properly recorded, that would be a security interest.

      However, obtaining a financing for Maddie's loan did not occur, and there are no facts to suggest that CRAS failed to take adequate action in arranging for such credit. Once CRAS was unable to get financing, the condition subsequent failed and the contract was subject to cancellation. CRAS was entitled to retake possession of its vehicle so long as it did so without breaching the peace.

(c)

      As a the owner of propery subject to a foreclosure sale, Maddie would generally have a right of redemption. A right of redemption is the ability to pay off the outstanding debt at or before the foreclosure sale, which allows the debtor to retake ownership of the property. Furthermore, Maddie also has a right to notice of any foreclosure sales and that these sales must be conducted in a commercially reasonable manner. While it appears that the foreclosure sale here was reasonable, as it was at a public auction, she was never properly noticed. CRAS never attempted to provide Maddie notice by mail and then sold the car within a day of repossessing it. Thus, Maddie should have the oppurtunity to challenge the foreclosure for lack of notice. She will not be entitled to specific performance, as the facts do not suggest the car is unique, but she should be able to receive damages.

      A: A Virginia Court Will Construe the Contract In Favor of Maddie Because It Represents a Contract of Adhesion

      The inconsistency in the contract will be resolved against CRAS because it represents a disfavored contract of adhesion.

      A contract of adhesion is a "take it or leave it" contract that a party with superior bargaining power enters into with a party with lesser bargaining power. Although such contracts are legal, they are disfavored. Therefore, an ambiguous or inconsistent language will be resolved against the party who wrote the documents and had the superior bargaining position.

      Here, the facts indicate that Maggie completed the documents without negotiation. This is a clear indicator of an adhesion contract. Further, the contracts were furnished by CRAS and done of their standard forms. CRAS also had superior bargaining power as the furnisher of the automobile.

      This contract also included an integration clause indicating that it represented "the entire agreement" between the parties. This places the contract within the purview of the Parol Evidence Rule, which limits the admissibility of extrinsic evidence to contradict or alter the terms of the agreement.

      In this case, the error in the contract is an example of a patent ambiguity: an error that occurs on the face of the contract and does not involve a term unique to the parties requiring interpretation. When a contract contains a patent ambiguity, that ambiguity must be resolved within the four corners of the agreement and extrinsic evidence of intent is not admissible.

      Here, based on all of the factors above, a Virginia court will apply a rule of construction that resolves ambiguities in favor of Maddie and against CRAS. Because extrinsic evidence is not admissible and the two provisions cannot be reconciled, the only way to resolve these conflicting provisions is to either strike them from the contract or resolve them in favor of Maggie ownership.

      As such, the likely result is that the court will construe the contract in favor of Maggie and rule that the car became Maggie's as of the date of sale.

      B: The Agreement Between Maggie and CRAS Involved a Purchase Money Security Interest and It Entitled CRAS To Repossess the Car

      A purchase money security interest (PMSI) arises when the lender provides the borrower with the funds necessary to secure the collateral at issue. A purchase money security interest takes priority over other security interests or liens because of its direct relation to the collateral.

      Here, CRAS's loan to Maggie allowed her to purchase the car and the Credit Placement Order specifically states that the car will act as collateral for the loan if CRAS is unable to obtain credit from another lender. This creates a valid PMSI, which automatically perfects for 20 days. CRAS was required to file a financing statement within 20 days in order to perfect its interest from longer than 20 days.

      It appears that CRAS failed to perfect its security interest in the car in a timely fashion because their is no indication that it filed a financing statement within 20 days. However, an unperfect PMSI still creates rights in CRAS regarding the collateral. Therefore, CRAS was allowed to repossess the car if it did so without breach of the peace.

      Here, there is no indication that CRAS breached the peace in its recovery of the vehicle. CRAS was entitled to trespass onto Maddie's home to repossess the car as long as it did so without threat of violence. Based on the facts provided, it appears that CRAS met the requirements and thus validly repossessed the car.

      C: Maddie Was Entitled to Notice of the Sale, An Opportunity to Redeem the Vehicle Before the Sale and Assurances that the Sale Was Commercially Reasonable

      UCC Article 9 provides various protections for Maddie involving the sale of the car. These protections include a right to notice of sale at least 10 days before it is conducted, an opportunity to redeem the car during the notice period and an ability to require CRAS to conduct a commercially reasonable sale.

      First, as to notice, CRAS was required to provide Maddie with at least 10 days notice before it conducted the sale of the car. Here, CRAS failed to meet that provision because it sold the car "the next day" after it repossessed it from Maggie. CRAS's attempts to contact Maggie before repossession do not satisfy its obligations as to notice of sale. Thus, CRAS violated Maggie's rights under UCC Article 9 by selling the car one day after repossession without providing notice to Maddie.

      The UCC also includes a right to redeem collateral that is seized to cover a debt. This right to redeem is part of the reason that the Code also requires notice of the sale, so that the debtor may attempt to obtain the funds necessary to pay of the debt and retake possession of the collateral. Here, that right to redeem was violated by the unreasonably fast sale of the car. Maddie did not have sufficient time or notice to exercise her statutory right to redemption. Therefore, CRAS also violated Maddie's UCC rights in this regard.

      Finally, Maddie had the right to ensure that CRAS conducted a commerically reasonable sale. The commerical reasonableness requirements prevents a lender from being able to repossess collateral, sell it at an unreasonably low price and then proceed against the debtor for a deficiency judgment to cover the rest of the debt.

      One requirement of a commercially reasonable sale involves advertisement of the pending sale in a newspaper of local circulation. Here, CRAS made no attempt to conduct such advertising. Further, in conducted the sale only one day after repossessing the car, which was a further representation of its commerical unreasonableness.

      Because CRAS conducted a commerically unreasonable sale, it is estopped from seeking a deficiency judgment against Maddie. Thus, even if it recovered less than $17,000 (the cost of the car minus the $1,000 down payment), it may not go after Maddie for any additional amount of the debt.