Suppose a debt is 90,000. The debtor purports to pledge an undivided half of a jointly owned warehouse and unspecified items inside it, but gives no real delivery. The existence of debt alone cannot make this a complete valid pledge: undivided status, lack of identification and lack of possession are separate defects.
If instead the debtor pledges a specified, vacated and independently possessable item and validly delivers it, those obstacles can be removed. The special loss rule then compares collateral value with the debt.
The next passage considers obligations from salam and sarf, neutral third-party custody and particular types of fungible property.
Opening interactive controls...
Integrated case and next boundary
Kitab al-Rahn: Pledge Formation, Possession, Liability and Eligible Collateral
Suppose a debt is 90,000. The debtor purports to pledge an undivided half of a jointly owned warehouse and unspecified items inside it, but gives no real delivery. The existence of debt alone cannot make this a complete valid pledge: undivided status, lack of identification and lack of possession are separate defects.
If instead the debtor pledges a specified, vacated and independently possessable item and validly delivers it, those obstacles can be removed. The special loss rule then compares collateral value with the debt.
The next passage considers obligations from salam and sarf, neutral third-party custody and particular types of fungible property.