PART 1 (CHAPTER 5)

Question 1

General guarantee of obligations

Answer 1

the debtor’s assets that can be seized

Question 2

Things that cannot be seized

Answer 2

things that cannot be assigned (ownership cannot be transferred); things in public domain; objects whose seizure may offend common decency

Question 3

Things that can only be partially seized

Answer 3

salaries; wages; insurance; compensation for accident; annuity…

Question 4

Personal securities

Answer 4

• another person guaranties, with his or her assets, the fulfilment of the debtor’s obligations
• the guarantor enjoyes the benefit of prior excussio
• prior excussio allows the guarantor to delay payment until it is clear that the debtor cannot fulfill their obligations using their own assets

Question 5

In rem securities

Answer 5

a fixed charge is attached to a particular asset (of the debtor) and gives the chargeholder preference in payment for the value of the sale of the asset in question (ex. mortgage, pledge)

Question 6

Provision of security

Answer 6

• “providing security” means giving a guarantee to fulfill obligations
• the provision of security is a special guarantee of obligations that includes all situation in which someone is required by law, the court, or as a result of a contract to provide a security without indicating its type

Question 7

Pledge

Answer 7

• when you offer them something valuable as a guarantee that you’ll pay back the money you owe them, including any interest
• this guarantee gives the person you owe money to special rights over certain things you own or rights you have
• for a pledge to be effective, you must physically give the valuable item to the creditor or a document confirming that the item is exclusively available to them

Question 8

Mortgage

Answer 8

a legal document which offers a building or land that the law deems equivalent to immovable things

Question 9

Right of retention

Answer 9

a debtor who has a claim against the creditor enjoys the right of retention. If someone is obliged to return a certain thing, but at the same time holds a credit, he enjoys the right to not return said thing until the credit is satisfied

Question 10

“Upon First Demand” Bank Guarantee

Answer 10

• personal guarantee provided by a financial institution (a bank)
• the guarantor (Issuing Bank), at the request of a client (the Principal), undertakes to pay a third party (the beneficiary) a certain amount in the even that the Principal breaches his obligations under the contract, the Principal will then have to pay the Issuing Bank

Question 11

Prior ranking

Answer 11

a lineup based on who gets paid first when an asset is sold or a company is liquidated

Question 12

Types of pledges

Answer 12

• Pledge of Things
• Pledge of Rights

Question 13

Pledge of Things

Answer 13

you’re giving the creditor something physical as a guarantee

Question 14

Pledge of Rights

Answer 14

you’re giving someone rights you have as a guarantee