Hypothecation
/ˌhaɪpɵˈtɛkʃən/
Definitions
- (n.) The pledging of assets as security for a debt without transfer of possession or ownership.
The borrower agreed to hypothecation of inventory to secure the loan.
Related terms
See also
Commentary
Hypothecation is distinct from pledge as possession remains with the debtor, requiring precise wording to ensure enforceability.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.