A pledge is contract where a person deposits an article or goods with a lender of money as security for the repayment of a loan or performance of a promise. Pledge is also known as a pawn. In other words, to give something valuable to a person or organisation that has lent you money, which they can keep if you fail to pay back your loan.
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A pledge is a formal promise that conveys possessory title to property owned by a debtor (the pledgor) to a creditor to secure repayment for some debt or obligation and to the mutual benefit of both parties. The term is also used to denote the property which constitutes the security.
Example uses of this document:
Pledges are typically used in securing loans, pawning property for cash, and guaranteeing that contracted work will be done. The second party must also have a lien—or legal claim—upon the property in question. If the terms are not met, the second party can sell the property to satisfy the debt.
Substitution of Securities
This document was written for Agreements.org by a Senior Attorney (Admitted in the High Court) with more than 15 years’ experience. It complies with current South African law.