Law: Bank security

Qualities of a Guarantee

Must be in writing and signed in accordance of Section 4 of Statutes and frauds act.

What is Secondary Liability

‘if X doesnt pay, i will’ which must be in writing and is a Guarantee

What is Primary Liability

‘Lend the money to X and i wil lservice and pay it’ which can be oral but is not enforcable.

What is a charge

Security over an asset

What is a Fixed charge?

A charge attached to specific assets like buildings, where the holder needs permission to sell.

Details must be recorded within 21 days of creation to the register.

What is a Floating charge?

Charges which float over present and future assets like warehouse stock. These are exclusive to companies.

What is a Romalpa clause?

Retention to title clause, where purchaser only recieves ownership when fully paid.

How is a Romalpa clause defeated?

When the underlying asset changes form.

What are the types of Loans?

Plain Vanilla loan, Moritarium loan, Bullet loan, Balloon Loan and Front/Back end loan.

What is a Plain Vanilla loan

Standard loan

What is a Moritarium loan

No payment for a set period where payments continue at later date

What is a Bullet loan

Interest is paid during loan period, then principal at end

What is a Balloon Loan

Small payments during life, Big payment at the end.

What is a Front end loan?

Pay more early on

What is a Back end loan

Pay more later on.