Pledge Contract Overview
A pledge contract is a specific type of bailment where a person (the pledgor) delivers goods to another person (the pledgee) as security for a debt or obligation. Understanding the roles in a pledge contract is crucial for clarity in legal contexts.
Key Roles in a Pledge Contract
- Pledgor: The person who delivers the goods to the pledgee, usually to secure a loan or obligation.
- Pledgee: The person who receives the goods and holds them as security. This individual is also known as the bailee in the context of a pledge.
Why "Pledgee" is the Correct Answer
- The term "bailee" refers to someone who temporarily takes possession of someone else's property but does not have ownership. In pledge contracts, this role is specifically referred to as the pledgee.
- In legal terms, the pledgee retains the goods until the obligation is fulfilled, hence acting as the bailee in this scenario. The pledgee has a lien over the goods, meaning they can retain possession until the debt is paid.
Conclusion
Understanding these roles is essential in the context of security interests and financial transactions. The pledgee (option B) is the correct term for the bailee in a pledge contract, as they have the obligation to safeguard the pledged property until the contractual terms are satisfied.