Question

Delivery of goods as security for payment of a debt or performance of a promise is called

• A. Mortgage
• B. Pledge
• C. Contract
• D. Agency

Answer 1

The Correct Option is B

In legal studies, when goods are delivered as security for the payment of a debt or performance of a promise, it is referred to as a "Pledge." A pledge involves transferring possession, but not ownership, of the goods to the pledgee (the party receiving the pledge) until the pledgor (the party offering the pledge) fulfills their obligation. This is distinct from other terms:

• Mortgage: Involves an interest in real property secured by a loan.
• Contract: A legal agreement between parties with specific terms.
• Agency: A relationship where an agent is authorized to act on behalf of a principal.

Hence, the correct answer is: Pledge.