Posted February 1, 2014 by advocateguru in Learning Centre
 
 

Pledge

Pledge or pawn is a contract whereby an article is deposited with a lender of money or promisee as security for the repayment of a loan or performance of a promise. The bailor or depositor is called the “Pawnor” and the bailee or depositee the “Pawnee”. Since pledge is a branch of bailment the pawness is bound to take reasonable care of the goods pledged with him. Any kind of goods, valuables, documents or securities may be pledged. The Government securities, e.g., promissory notes must, however, is pledged by endorsement and delivery.

The following are the essential ingredients of a pledge:

(i) The property pledged should be delivered to the Pawnee.

(ii)           Delivery should be in pursuance of contract.

(iii)          Delivery should be for the purpose of security.

(iv)         Delivery should be upon a condition to return.


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