Loan Borrower Rights in Hypothecation
The question describes a loan scenario where the borrower can use a specific asset, like equipment, but cannot sell it until the loan is fully repaid. This situation corresponds to a specific type of security arrangement.
Analyzing Loan Security Options
Let's examine the options provided:
- Mortgage loans: Typically secured by real estate, not specifically equipment, and the terms differ.
- Unsecured loans: These loans do not require any collateral, which is contrary to the scenario where equipment is involved as security.
- Collateral security: This is a broad term. While the equipment acts as collateral, this option doesn't specify the exact nature of the lender-borrower agreement regarding possession and sale rights.
- Hypothecation: This is a specific type of security agreement where the borrower retains possession and use of the asset (the equipment) while pledging it to the lender. The borrower's right to sell the asset is restricted until the loan obligation is fulfilled. This precisely matches the conditions described in the question.
Therefore, hypothecation is the correct term for this arrangement.
Conclusion
Under a hypothecation agreement, the borrower is permitted to use the equipment as collateral but cannot sell it until the loan is fully paid off.
Similar Questions
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A. Zero tillage is an extreme form of minimum tillage.
B. In Zero tillage, herbicide functions are extended
C. It is an energy consuming operation
D. It promotes the rapid decomposition of soil organic matter
E. In Zero tillage, primary tillage is completely avoided and secondary tillage is restricted to root zone only.
Choose the correct answer from the options given below : - Select the correct statements about the Igneous rocks.
A. Igneous rocks are formed from the consolidation of sediments
B. Igneous rocks are formed by solidification of molten material magma on or beneath benefits of earth surface
C. Igneous rock make up 95% of the earth crust
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E. Granite and sandstone are the example of igneous rocks
Choose the correct answer from the options given below : - The correct sequence of soil development stages is :
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B. Virile stage
C. Senile stage
D. Juvenile stage
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A. Calcium oxide
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Important Questions from Mixed Topic (CUET PG)
- Who was the founder of Bolshevik Communist party?
- What is the key guide to statecraft in the realist tradition?
- Chronologically arrange the events in the Cold War period.
A. Berlin Wall is constructed
B. Communist China joins the UN
C. Soviet invasion of Czechoslovakia
D. Berlin Blockade
Choose the correct answer from the options given below: Morgenthau's principles of political realism are:
A. Politics is rooted in permanent and unchanging human nature which is basically self centred, self-regarding and self-interested
B. Politics is an autonomous sphere of action and cannot therefore be reduced to morals
C. International Politics is an arena of conflicting self-interests
D. The ethics of international relations is situational ethics which is very different from private morality
Choose the correct answer from the options given below:Who among the following political thinkers consider the anarchical self help system to be a compelling factor for States to maximise their relative power positions?
