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Pledge: Difference between revisions
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{{anat|security|}}A {{tag|legal security}} interest — a type of [[bailment]], if we’re getting technical — created by transferring [[possession]] of an asset [[by way of security]] for a an obligation, with the intention to create that [[security interest]]. It is the ''act'' of pledging, not the document ''evidencing'' the pledge, that matters. | {{anat|security|}}{{d|Pledge|/plɛʤ/|n|}}A {{tag|legal security}} interest — a type of [[bailment]], if we’re getting technical — created by transferring [[possession]] of an asset [[by way of security]] for a an obligation, with the intention to create that [[security interest]]. It is the ''act'' of pledging, not the document ''evidencing'' the pledge, that matters. | ||
The [[pledgee]] takes a “special” proprietary legal interest in the assets, though, but does ''not'' take legal title to them. The key factor is [[possession]]. This makes a pledge kind of awkward where the debtor wants to carry on holding or using the asset — in that case, a [[floating charge]] or an [[assignment by way of security]] is better — but you do see it (as for example in the {{1995csd}} — though that document is far less popular than the non-pledge {{1994csa}}, which is a straight out [[title transfer collateral arrangement]].) | The [[pledgee]] takes a “special” proprietary legal interest in the assets, though, but does ''not'' take legal title to them. The key factor is [[possession]]. This makes a pledge kind of awkward where the debtor wants to carry on holding or using the asset — in that case, a [[floating charge]] or an [[assignment by way of security]] is better — but you do see it (as for example in the {{1995csd}} — though that document is far less popular than the non-pledge {{1994csa}}, which is a straight out [[title transfer collateral arrangement]].) | ||
Preferred means of delivering collateral vary in different markets. If you had to generalise, you would say our American friends west across the big ditch prefer [[pledge]] mechanics; British and commonwealth types tend to favour [[title transfer]]. | Preferred means of delivering collateral vary in different markets. If you had to generalise, you would say our American friends, west across the big ditch, prefer [[pledge]] mechanics; British and commonwealth types tend to favour [[title transfer]]. | ||
{{Csa title transfer vs pledge|vmcsa}} | {{Csa title transfer vs pledge|vmcsa}} | ||