CREDIT TRANSACTIONS ARE CONTRACTS OF SECURITY

Category: Obligations and Contracts

CREDIT TRANSACTIONS ARE REALLY CONTRACTS OF SECURITY. THEY ARE TWO TYPES:

1.   SECURED   TRANSACTIONS   OR   CONTRACTS   OF   REAL SECURITY—Those   supported   by   a   collateral   or   an encumbrance of property

2.   UNSECURED     TRANSACTIONS     OR    CONTRACTS    OF PERSONAL  SECURITY—those  the  fulfillment  of  which  by the  principal  debtor  is  secured  or  supported  only  by  a promise  to  pay  or  the  personal  commitment  of  another such as a guarantor or surety