Steve goes to Sears to buy a riding lawnmower on January 10, 2005 to assist him in cutting his own yard. If Steve were to pay cash, the price of the lawnmower would be $5,000. Steve, however, did not have the money to pay cash so he signed an installment K with Sears and granted them a security interest in the lawnmower. Under the installment K, Steve will make monthly payments for three years. When the three years expires, he will have paid a total of $6050 for the lawnmower because of interest payments required by financing. In the security agreement a clause stated, “Purchaser warrants he is acquiring these goods for personal, family, or household use.” The installment contract stated that the debtor is in default if he does not make the payment by the 25th of each month.

Although Steve used the lawnmower for 3 months, he never made a payment. After repeatedly asking Steve for payment, Sears then sent a repo man to Steve’s house. The lawnmower was sitting in the driveway and the repo man took the lawnmower. Sears then decided to hold a public auction and sells to a high bidder for $2000. Sears then goes to court and tries to obtain tries to obtain a deficiency judgment for $4050.

In court, Steve argues that Sears violated Article 9 because it sold the mower without first giving him notice prior to the sale. If this is in fact true, what will be the result?

A. The court will apply the “set-off” rule. Steve's liability for a $4,050 deficiency will be reduced by the $1,550 consumer penalty Sears would owe to Steve under § 9-625(c). Therefore, Sears could obtain a $2500 deficiency judgment.

B. The court will apply the rebuttable presumption rule. Steve will pay no deficiency unless Sears proves that a commercially reasonable sale following proper notice would've produced a deficiency. Even if Sears successfully rebuts the presumption, however, Steve, however, Steve's liability for a $4,050 deficiency will be reduced by the $1,550 consumer penalty Sears would owe to Steve under § 9-625(c).

C. The court will apply the absolute bar rule, and Sears will not be able to recover a deficiency judgment from Steve.

D. Either A, B, or C, depending upon the jurisdiction.