Section I Elements of a Pledge

Pledge

Section I Elements of a Pledge

Article 1096

Pledge is a contract by which a person undertakes, as security for his debt or that of a third party, to hand over to the creditor or to a third person chosen by the parties, a thing over which he constitutes, in favor of the creditor, a real right, and by which the creditor is allowed to retain the thing pledged until repayment of the debt and to obtain payment of his claim out of the price of such thing, no matter in whose hands it may be, in preference to unsecured creditors and to creditors following him in rank.

Article 1097

Only movables or immovables which can be sold independently by public auction may be the object of a pledge.

Article 1098

The provisions of Article 1033 and Articles 1040 to 1042 relating to mortgage are applicable to pledge.