Bailment

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A special type of security interest, most commonly articulated in the word of finance in the shape of a pledge. A bailee has possession of but no legal title to the chattel, but this operates as good practical security, because the bailee can demand the bailor pay its bill before giving the item back.

This is why your mechanic has that smug look when you roll up in the Disco for your MOT.

To be compared with a trust relationship, where the person holding the item has legal title to it, but not possession.

Cash and bitcoin

Can you have a bailment over cash? The Jolly Contrarian has heard it said — by persons of good repute — that one can, but thee JC struggles with that idea. If I deliver you cash, even by way of surety]], it is in the nature of cash that you take title to it absolutely. Any third person to whom you give it takes title to it absolutely without need to enquire as to competing interests. If cash didn’t have this quality, it would be less valuable as cash.

See also

• Pledge
• Charge
• Assignment by way of security
• Title transfer collateral arrangement