Quick Summary
A pledge is the delivery of goods by one person (pledgor) to another (pledgee) as security for the repayment of a debt or performance of an obligation, with the understanding that the goods will be returned once the obligation is fulfilled.
A pledge is the delivery of goods by one person (pledgor) to another (pledgee) as security for the repayment of a debt or performance of an obligation, with the understanding that the goods will be returned once the obligation is fulfilled.
Key Characteristics
- Delivery of goods as security for debt
- Pledgee takes possession of goods
- Governed by Section 172 of Indian Contract Act
Legal Framework
Possession is essential for valid pledge
Key Points
- Delivery of goods as security for debt
- Pledgee takes possession of goods
- Governed by Section 172 of Indian Contract Act
- Pledgee can sell goods on default after notice
- Common with pawnbrokers and gold loans
- Possession is essential for valid pledge