04 May 2012
What does following lines means when mentioned in the agreement
"hereinafter referred to as 'the Pledgor, which expression shall, unless it be repugnant to the subject or context thereof, include its successors and assigns"
04 May 2012
Suppose I am pledging some gold ornaments to secure a loan from some bank. The agreement shall, at first instance define me fully …so and so, son of so and so, resident of … etc (or in case of a company --- so & so having its registered office at so and so..) then it adds the sentence you have quoted. By virtue of this sentence: a) the agreement need not fully describe the borrow / guarantor in subsequent pages; it will just mention pledger – simplifying the documentation process (no need to insert the name in every paragraph) and b)it also paves the way for inclusion of “successors and assigns”. If I die, my heirs (i.e. my successors) will inherit the gold and will be governed by the same agreement. If a firm after securing a loan with pledge gets acquired, the acquirer will get ownership interest in the pledged goods (subject to pledge of course) and the acquirer’s relationship with the pledgee shall continue to be governed by the same agreement.
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