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CREDIT TRANSACTIONSCREDIT TRANSACTIONSQ: What is credit?UN I V E R S I T Y O FSA N T OTO M A SFacultaddeDerechoCivilACADEMICSCHAIR:LESTERJAYALANE. FLORESIIVICECHAIRSFORACADEMICS:KARENJOYG. SABUGO& JOHNHENRYC. MENDOZAVICECHAIR FORADMINISTRATION ANDFINANCE: JEANELLEC. LEEVICECHAIRS FORLAYOUTANDDESIGN:EARLLOUIEM. MASACAYAN& THEENAC. MARTINEZA:Itisaperson sability to borrow money byvirtue of confidence or trust reposed in him bythe lender that he will pay what he may promise.Q: What is credit transaction?A:It refers to agreement based on trust or beliefof someone on the ability of another person tocomply with his obligations.Q: What do credit transactions include?A:They include all transactions involving loans of:1.goods2.servicew3.moneyextendedtoanothereithergratuitouslyoronerouslywithapromise to pay or deliver in the future.Q: What is security?A:It is something given, deposited, or serving as ameans to ensure the fulfillment or enforcementof an obligation or of protecting some interest inthe property.Q: What are the types of security?A:Personal:when an individual become a suretyor a guarantor.Real or property:when an encumbrance ismade on property.Q: What are the kinds of credit transactions?A:1.As contracts of securitya.Contracts of real securityThesearecontractssupportedbycollateral/sorburdenedbyanencumbrance on property such asmortgage and pledge.b.ContractsofpersonalsecurityThesearecontractswhereperformance by the principal debtoris not supported by collateral/s butonly by a promise to pay or by thepersonalundertakingorcommitment of another person suchas in surety or guaranty.2.As to their existencea.Principal contractsThey can existalone.Theirexistencedoesnotdepend on the existence of anothercontract.(e.g.commodatumandmutuum)b.Accessory contractsThey have todepend on another contract. Theseaccessory contracts depend on theexistence of a principal contract ofloan.(e.g.guarantyproper,suretyship,pledge,mortgageandantichresis)3.As to their considerationa.OnerousThis is a contract wherethereisconsiderationorburdenimposed like interest.b.GratuitousThis is a contract wherethere is no consideration or burdenimposed. (e.g.commodatum)Q: What is bailment?A:It is the delivery of a personal property forsome particular use, or on mere deposit, upon acontract,expressorimplied,thatafterthepurpose has been fulfilled, it shall be redeliveredto the person who delivered it, or otherwise dealtwith according to his directions, or kept until hereclaims it, as the case may be.Note:Generally, no fiduciary relationship is createdby bailment. No trusteebeneficiary relationship iscreated.