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What Is a Pledge in Contract Law

The pledge serves as collateral to ensure that the Pawnor repays the debt or fulfills the obligation. These are mainly used to secure loans and if the loan is not repaid at maturity, the pawnshop has the right to sell the pledged item to pay the fee. The essential characteristics of the promise are given as follows: Joseph desperately needs money, so he deposits his gold watch for Michael as collateral for the borrowed money. This is a case of pledge in which the gold watch is kept as collateral for the amount lent. This is Joseph the Pawnor and Michael is the Pawnee. v. to deposit personal property as security for a personal loan of money. If the loan is not repaid at maturity, the personal property pledged to the lender will expire. The property is called security. Collateral is the same as pawn. 2) promise to do something. (See: Farmers) The pledged property must be in possession of a pledge. This can be achieved in two ways.

The property may be in the beneficial possession of the secured creditor, i.e. in physical possession (for example, Mary John`s stereo system is in her home). Otherwise, it may be in the implied possession of the secured creditor, which means that the pledge has some control over the asset, which is usually the case if the actual possession is alternately, the pledge can claim damages on the basis of the conversion of the pledged asset. If A is in possession of the watch under a countervailable contract, the watch is handed over to B in good faith. B and does not know the title of the watch, he accepts it. This commitment is deemed valid. But if B knows the title, then this promise is not considered valid. In earlier medieval law, especially in Germanic law, there were two types of pledges which were either possessive (cf.

Old English marriage, Old French gage, Old High German Wetti, Latin pignus depositum), i.e. delivered from the outset, or without possession (cf. OE bād, OFr nam, nant, OHG pfant, L pignus oppositum), i.e. seized on the due date, and the latter essentially established the legal principle of seizure. This distinction persists in some systems, e.B. French meter vs Nantissement and Dutch vuistpand vs Stilpand. Tokens (symbolic) of mutual commitments were usually incorporated into official ceremonies to solidify agreements and other transactions. If A and B want to conclude the contract for the deposit for the purpose that B repairs A`s car, they must conclude an agreement that contains all the instructions and orders of A regarding the repair and use of his property, etc. A pledge is a special type of deposit in which property is held as security for the performance of a promise or the payment of a debt. A deposit is a security deposit.

From the above discussion, one can draw the conclusion that the pledge is different from a mortgage, a line and a deposit, since delivery is an important factor in establishing a pledge. Ownership of the asset remains the property of the pawnshop, accepted in certain circumstances where the pawnshop has the right to sell the pledged asset. In addition, the pawnshop is required to treat the pledged asset appropriately. Section 178 of the Indian Contracts Act states that the pledge between the agent and Pawnee may be valid if the agent has taken possession of the goods with the consent of the owner and the lender has acted in good faith and does not know the original title of the goods. In the law, the word deposit is used in its technical sense, which means the change of ownership of the goods, that is, one person transfers the goods to another person. On the other hand, collateral is a type of deposit where one person makes his or her property available to another person as collateral against loans. The deposit and the pledge are examples of specific contracts. The deposit contract can be divided into three categories: for example, if Z borrows Rs. 200 from Y and holds his custody as collateral for the payment of the debt, the deposit of the guard will be a pledge. A pledge (also known as collateral) was defined in Chapter IX under sections 172 to 179 of the Indian Contract Act 1872. Section 172 of the Act defines pledge as “the deposit of property as security for the payment of a debt or the performance of a promise.” The judicial officer is called the “pledge” or the “pledge” and the guarantor the “pledge” or the “pawnshop”.

A borrowed Rs.100 from B and gave his cycle as collateral for the repayment of the amount, provided that if A repays to B, he gets his cycle back. .

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