CESSION & PLEDGE OF GOODS AGREEMENT
Summary This Cession and Pledge of Goods Agreement may be used where a debt is owed or may in the future be owed by a person, and additional security is required. By signing this Cession and Pledge of Goods, the debtor agrees to transfer to the creditor the right to the goods being ceded or pledged should the debtor default. The ceded goods may include, for example, shares, insurance policies, or an investment account.
Why do I need a Cession & Pledge of Goods? A Cession & Pledge of Goods contract affords you as the creditor additional security. In the event that the debtor defaults in payment, you may use this Cession and Pledge of Goods to claim the goods that the debtor has ceded / pledged in terms of this agreement. A Cession & Pledge of Goods agreement is often used as an additional security requirement when a customer applies for a credit facility, before any goods or services are delivered. It can also be used to obtain additional security before lending someone money or goods and equipment.
Also view: Cession of Book Debts
What type of business should use a Cession and Pledge of Goods Agreement? If your business has debtors that owe money, or there is a high likelihood that they will in the future owe money, then this Cession and Pledge of Goods may be considered to reduce your risk in the debtor defaulting.
What does the Contract of Cession & Pledge of Goods look like? The Cession contract template can be printed onto two pages.
What do you need to do to use the Cession & Pledge of Goods?
- Read the template cession agreement document to ensure that it suits your requirements. Make changes as required.
- Complete the relevant details, and get the debtor to sign.
- The Cession & Pledge contract is usually obtained at the beginning of the business relationship, or during the application stage, and before any goods / services / loan is delivered. But it can also be used to obtain additional security from a debtor who owes money.
If the transaction is subject to the National Credit Act 34 of 2005 then we recommend that specialist advice be obtained.
The Online Agreements Shop cc and its members, staff, legal advisers, partners and consultants, agents and any person associated therewith cannot be held liable for any loss or damage that is incurred or may be incurred by any person as a direct or indirect result of the use of this website or any document or information contained on or obtained from this website, nor as a result of anything that is contained in or left out of any document.