Part II Description of Interests, 4 Types of interest
Hugh Beale, Michael Bridge, Louise Gullifer, Eva Lomnicka
- Credit — Guarantees and security — Securities lending — Security issuer
This chapter examines how, under English law, there is a major conceptual divide between security interests and absolute interests. In relation to personal property, absolute interests are either ownership or possession. These are both rights in rem: they are enforceable against the whole world, including the liquidator or trustee in bankruptcy of a person against whom the right is asserted. Security interests are also rights in rem, but because they are given as security for an obligation, they are limited by being defeasible upon performance of that obligation. While English law will normally give effect to the intentions of the parties as expressed in the contract, there are some limits to the extent that the parties can change the nature of interests, and it is at this point that the court will recharacterize a transaction or an interest.