16 Questions
What is the primary characteristic of secured transactions?
Supported by a collateral or an encumbrance of property
What is the purpose of security in a credit transaction?
To ensure fulfillment or enforcement of an obligation
What type of contract is a loan?
Unilateral contract
What is the essential element for the perfection of a loan?
Delivery of the subject matter
What type of security involves an individual becoming a surety or guarantor?
Personal security
What is the contract of commodatum characterized by?
Delivery of a non-consumable thing with the promise to return the identical thing
Which type of credit transaction is supported by a collateral or an encumbrance of property?
Secured transactions
What is the primary purpose of security in a credit transaction?
To ensure the fulfillment of the obligation
What type of contract is characterized by the delivery of a non-consumable thing for a certain time with the obligation to return the identical thing?
Commodatum
What is the characteristic of a unilateral contract?
Only the borrower has the obligation
What is the essential element for the perfection of a credit transaction?
Delivery of the goods
What type of security is characterized by an encumbrance made on property?
Real security
What is the primary characteristic of an unsecured transaction?
Supported by a promise to pay
What is the characteristic of a real contract?
Delivery is essential
What is the result of a contract of commodatum?
No transfer of ownership
What is the primary purpose of a credit transaction?
To purchase goods or services
Study Notes
Credit Transactions
- A credit transaction involves the purchase or loan of goods, services, or money in the present with a promise to pay or deliver in the future.
- There are two types of credit transactions:
Secured Transactions
- Supported by a collateral or an encumbrance of property.
Unsecured Transactions
- Supported only by a promise to pay or the personal commitment of another, such as a guarantor or surety.
Security
- A security is something given, deposited, or serving as a means to ensure the fulfillment or enforcement of an obligation or protect some interest in the property.
- There are two types of security:
Personal Security
- When an individual becomes a surety or a guarantor.
Real or Property Security
- When an encumbrance is made on property, such as:
- Real estate mortgage
- Chattel mortgage over vessels or aircraft
- Security interest over movables
Characteristics of Loans
- A loan is a real contract, meaning delivery is essential for perfection of the loan.
- A promise to lend is binding upon the parties, being a consensual contract.
- A loan is a unilateral contract, meaning only the borrower has an obligation once the subject matter has been delivered.
Commodatum and Mutuum
- A commodatum is a contract where the bailor delivers a non-consumable thing to the bailee for a certain time, with the obligation to return the identical thing.
- There is no transfer of ownership in a commodatum.
- A mutuum is a contract where the object borrowed is a consumable thing, and the ownership of which is transferred to the borrower.
- The borrower incurs the obligation to return the same consumable thing to the lender in an equal amount, kind, and quality.
Credit Transactions
- A credit transaction involves the purchase or loan of goods, services, or money in the present with a promise to pay or deliver in the future.
- There are two types of credit transactions:
Secured Transactions
- Supported by a collateral or an encumbrance of property.
Unsecured Transactions
- Supported only by a promise to pay or the personal commitment of another, such as a guarantor or surety.
Security
- A security is something given, deposited, or serving as a means to ensure the fulfillment or enforcement of an obligation or protect some interest in the property.
- There are two types of security:
Personal Security
- When an individual becomes a surety or a guarantor.
Real or Property Security
- When an encumbrance is made on property, such as:
- Real estate mortgage
- Chattel mortgage over vessels or aircraft
- Security interest over movables
Characteristics of Loans
- A loan is a real contract, meaning delivery is essential for perfection of the loan.
- A promise to lend is binding upon the parties, being a consensual contract.
- A loan is a unilateral contract, meaning only the borrower has an obligation once the subject matter has been delivered.
Commodatum and Mutuum
- A commodatum is a contract where the bailor delivers a non-consumable thing to the bailee for a certain time, with the obligation to return the identical thing.
- There is no transfer of ownership in a commodatum.
- A mutuum is a contract where the object borrowed is a consumable thing, and the ownership of which is transferred to the borrower.
- The borrower incurs the obligation to return the same consumable thing to the lender in an equal amount, kind, and quality.
Learn about credit transactions, including secured and unsecured transactions, and the role of collateral and security in these contracts.
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