Talk:Security interest
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Should be some mention of deed of trust, an alternative in WA and other states to true mortgage which does not require judicial approval to foreclose.--Zilonis 13:53, 27 July 2006 (UTC)
[edit] Guarantee
Explain the distinction between a guarantee and a security interest.
Wabbitus 16:19, 22 December 2006 (UTC)
Dear Wabbitus: A "guarantee" (as a noun) can be defined as "a promise to answer for the debt, default or miscarriage of another" (i.e., for the debt of another person); see Barron's Law Dictionary, p. 207 (2d ed. 1984). Another definition is "a warranty or promise to undertake an original obligation." Id. Under these two definitions, a guarantee and a security interest are quite different. With a guarantee as the term is used in these two definitions, there is no transfer of any interest in property. That is, the creditor is not receiving an interest in a specific item of property (real estate, equipment, whatever) to protect the creditor in case the debtor defaults. An example of a guarantee would be where a father guarantees to a creditor that the father will pay his son's debt to the creditor in the event the son does not pay. In this example, the father is not actually pledging any specific property that the creditor can take if the son does not pay.
There is, however, another definition of "guarantee" that might come a bit closer to the idea of "security interest". Here's the definition: "something given as security for the performance of an act [ . . . ]"; see Barron's Law Dictionary, p. 207 (2d ed. 1984). I suppose the "something given" could be an item of specific property.
At any rate, the term "guarantee" in law is generally used to mean a "personal guarantee" -- a promise, to a creditor, to pay the debt owed by another person or entity in the event that the debtor does not pay. Generally, the guarantee itself does not necessarily include giving the creditor any interest in a particular item of property. By contrast, the granting of a security interest is, by definition, granting the creditor an interest in a specific item (or items) of property. That's the important distinction.
By the way, the term guarantee can also mean the warranty or promise that a store, a seller of merchandise, gives you when you buy a product. (Seller promises to make the product good or replace it if it doesn't work right -- that sort of thing.)
I don't know that the term "guarantee" necessarily needs to be addressed in the article on Security interest, but maybe some editor will want to add something on that. Yours, Famspear 16:59, 22 December 2006 (UTC)
- Legally speaking a guarantee is just a personal obligation on the part of the guarantor to make good a debt or obligation of a third party. A security interest is a proprietary right that attaches to a specific asset so that the asset can be taken or sold if the obligation is not performed. They are both "security" in the loose sense of the word, in that the person to whom the debt is owed will feel more secure if he has the benefit of a guarantee or the benefit of a security interest, but conceptually they are very different things. For more on guarantees, see surety. --Legis (talk - contributions) 13:28, 16 January 2007 (UTC)
[edit] Merger proposal
I propose the articles Security interest, Security agreement, and Secured transaction all be merged together. Currently, the article for security interest is the only one of any substance while the other two are woefully small. I think all can be best described in a single article; after all, a security agreement is just a contract reflecting a secured transaction while a security interest is what makes the transaction secured. Personally, I think Secured transaction would be the most overarching title for the merged article but that can be open for discussion. Pygora123 02:48, 14 February 2007 (UTC)
- I think they probably could be merged, but one needs to be a little careful about over consolidating - a security interest can arise by operation of law without a security agreement, and equally a transaction can be secured without ever granting a 'security interest' in the class sense of the word by way of set-off or title transfer arrangements (common in the UK, although I understand less so in the US; can't speak for other jurisdictions). --Legis (talk - contributions) 08:15, 14 February 2007 (UTC)
