06 UST Golden Notes - Credit Transactions.pdf - CREDIT TRANSACTIONS CREDIT TRANSACTIONS Q What is credit b A It is a persons ability to borrow money by

06 UST Golden Notes - Credit Transactions.pdf - CREDIT...

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C REDIT T RANSACTIONS CREDIT TRANSACTIONS Q: What is credit? U N I V E R S I T Y O F S A N T O T O M A S F a c u l t a d d e D e r e c h o C i v i l A CADEMICS C HAIR : L ESTER J AY A LAN E. F LORES II V ICE C HAIRS F OR A CADEMICS : K AREN J OY G. S ABUGO & J OHN H ENRY C. M ENDOZA V ICE C HAIR FOR A DMINISTRATION AND F INANCE : J EANELLE C. L EE V ICE C HAIRS FOR L AY O UT A ND D ESIGN : E ARL L OUIE M. M ASACAYAN & T HEENA C. M ARTINEZ A: It is a person s ability to borrow money by virtue of confidence or trust reposed in him by the lender that he will pay what he may promise. Q: What is credit transaction? A: It refers to agreement based on trust or belief of someone on the ability of another person to comply with his obligations. Q: What do credit transactions include? A: They include all transactions involving loans of: 1. goods 2. servicew 3. money extended to another either gratuitously or onerously with a promise to pay or deliver in the future. Q: What is security? A: It is something given, deposited, or serving as a means to ensure the fulfillment or enforcement of an obligation or of protecting some interest in the property. Q: What are the types of security? A: Personal: when an individual become a surety or a guarantor. Real or property: when an encumbrance is made on property. Q: What are the kinds of credit transactions? A: 1. As contracts of security a. Contracts of real security These are contracts supported by collateral/s or burdened by an encumbrance on property such as mortgage and pledge. b. Contracts of personal security These are contracts where performance by the principal debtor is not supported by collateral/s but only by a promise to pay or by the personal undertaking or commitment of another person such as in surety or guaranty. 2. As to their existence a. Principal contracts They can exist alone. Their existence does not depend on the existence of another contract. ( e.g. commodatum and mutuum) b. Accessory contracts They have to depend on another contract. These accessory contracts depend on the existence of a principal contract of loan. ( e.g. guaranty proper, suretyship, pledge, mortgage and antichresis) 3. As to their consideration a. Onerous This is a contract where there is consideration or burden imposed like interest. b. Gratuitous This is a contract where there is no consideration or burden imposed. ( e.g. commodatum) Q: What is bailment? A: It is the delivery of a personal property for some particular use, or on mere deposit, upon a contract, express or implied, that after the purpose has been fulfilled, it shall be redelivered to the person who delivered it, or otherwise dealt with according to his directions, or kept until he reclaims it, as the case may be. Note: Generally, no fiduciary relationship is created by bailment. No trustee beneficiary relationship is created.
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