LAW 603 Lecture Notes - Lecture 10: Secured Creditor, Security Interest, Consignee
31 Mar 2016
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Creditor: agrees to accept payment in future. Guarantor: third party agrees to satisfy the principal debtors obligation if the debtor fails to do so. By transferring possession to creditor (pawn or pledge: item sold by creditor if debt not repaid. Limited use in business, as often need asset/ collateral for business. By contract without requiring transfer of possession: debtor keeps property, creditor can take possession of property if debt not paid. Chattel mortgage: debtor transfers title in collateral to secured party, creditor seizes asset (e. g. truck) if debt not repaid. Without transferring ownership to the creditors or possession such as: conditional sales. Creation of conditional sales: sale of goods, buyer receives immediate possession, seller retains title until paid full, seller recovers goods if price not paid. Common in: consumer transactions, business with ongoing relationship. Buyer/debtor is typically responsible for any damage to the goods until payment made in full.
