Part I Introduction, 1 Introduction
Hugh Beale, Michael Bridge, Louise Gullifer, Eva Lomnicka
- Assignment of credit — Mortgage — Pledge — Debt — Collateral agreement — Set-off
This introductory chapter talks about propriety security taken by creditors from debtors to support the repayment of loans or, much less frequently, the performance of other obligations. The security normally takes the form of a pledge, mortgage, or charge over the debtor’s property. The chapter also considers transactions that on a traditional analysis do not involve the taking of security but that have a similar economic function, in that a party that provides credit retains property rights over assets that in practice are being purchased by the debtor with the credit provided. These transactions involve what is often called ‘vendor credit’ as opposed to ‘lender credit’. The equivalent of security may also be produced by a host of other contractual devices, such as priority agreements, contractual set-off, and liens over sub-freights.