A delivery of goods by one person to another as a security for the repayment of a debt is made. What is…
The arrangement is a pledge: goods are delivered as security for repayment of a debt. A pledge is a particular kind of bailment, so bailment describes the broader…
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A delivery of goods by one person to another as a security for the repayment of a debt is made. What is it called as per the Contract Act?
Answer and explanation
Correct answer D
The arrangement is a pledge: goods are delivered as security for repayment of a debt. A pledge is a particular kind of bailment, so bailment describes the broader relationship while pledge identifies its security purpose. Hypothecation generally leaves possession with the debtor, unlike the delivery described here.
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