Hypothecation

Download .pdf, .docx, .epub, .txt
Did you like this example?

Hypothecation: Under this mode of security, loans are provided against the security of movable property, usually inventory of goods. The goods hypothecated, however, continue to be in the possession of the owner of these goods (i. e. , the borrower). The rights of the lending institution (hypothecatee) depend upon the terms of contract between the borrower and the lender. Although the lender does not have physical possessions of the goods, it has legal right to sell the goods to realize the outstanding loan. Hypothecation facility is normally not available to new borrowers. Hypothecation differs from mortgage in two respects: . Mortgage relates to immoveable property whereas hypothecation relates to movables. 2. In mortgage there is transfer of interest in the property of the creditor but in hypothecation there is only obligation to repay money and no transfer of interest. Assignment: It is a mode of security to a banker for an advance. It is transfer of a right, property or a debt. The transferor is called assignor and the transferee assignee. Borrower assigns actionable claims to the banker as a security for an advance. Debt is secured by mortgage of immovable property or by hypothecation or pledge of movable property. All the rights and remedies of the transferor vest in the transferee. The transferee of an actionable claim takes it, subject to all the liabilities and equities to which the transferor was subject on the date of the transfer. Book debt, money due from govt. dept and life insurance policies can be kept as security. Lien: The term lien refers to the right of a party to retain possession of goods and securities belonging to another party until a debt due from him is paid. Banker acquirers the right to sell the goods which came into its possession in case debt is not paid.

Do you want to see the Full Version?

View full version

Having doubts about how to write your paper correctly?

Our editors will help you fix any mistakes and get an A+!

Get started
Leave your email and we will send a sample to you.
Thank you!

We will send an essay sample to you in 24 Hours. If you need help faster you can always use our custom writing service.

Get help with my paper
Sorry, but copying text is forbidden on this website. You can leave an email and we will send it to you.