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Difference between revisions of "Security Agreements"
From Clicklaw Wikibooks
→Summary of the law
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[[File:Consumer_Law_and_Debt_-_Security_Agreements.jpg|thumb|275px|right| link=| <span style="font-size:50%;">Image via www.istockphoto.com</span>]] | [[File:Consumer_Law_and_Debt_-_Security_Agreements.jpg|thumb|275px|right| link=| <span style="font-size:50%;">Image via www.istockphoto.com</span>]] | ||
When a buyer does not have the money to pay for goods at the time of purchase, there are two ways the sale can be financed: | When a buyer does not have the money to pay for goods at the time of purchase, there are two ways the sale can be financed: | ||
* '''The seller extends credit to the buyer | * '''The seller extends credit to the buyer''': This means that the seller and buyer agree that the buyer will pay for the goods over a period of time.
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* '''The buyer borrows money to pay for the goods | * '''The buyer borrows money to pay for the goods''': The buyer may borrow from a lender such as a bank or credit union.
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When a buyer borrows money from a lender, that lender wants to ensure that the full amount is repaid and may want more protection than just the buyer’s promise. Similarly, a seller who extends credit as part of a sale is concerned about eventually being paid in full for the goods. | When a buyer borrows money from a lender, that lender wants to ensure that the full amount is repaid and may want more protection than just the buyer’s promise. Similarly, a seller who extends credit as part of a sale is concerned about eventually being paid in full for the goods. | ||
