chapter  1
35 Pages

Secured credit and fundamental principles of international instruments

The term ‘secured transactions’ can be defi ned as transactions that create security interests, or it refers to security over property as opposed to a personal security.1

1 Personal security is ‘the security furnished by a person . . . [as] a personal obligation assumed by a person other than the debtor . . . [p]ersonal security, therefore, is an obligation assumed by a third party as security for the principal debtor’s obligation’. See Drobnig, U. (2003) ‘Present and Future

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secured transactions law’, it defi nes ‘secured transaction’ as a transaction that creates a security right. This term under the Guide also covers outright transfers of a receivable subject to enforcement exception, although outright transfers do not secure the performance of an obligation.3 Dahan defi nes secured transactions as follows:

an agreement – usually accessory to a credit agreement, present or past – which grants the creditor a right relating to property, the purpose of which is to improve the creditor’s chance of getting paid or of receiving whatever else the debtor is required to do by way of performance of the contract . . . Such security may be possessory, where the creditor takes the possession of the subject matter of the security, or non-possessory.4