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Definition

Hypothecation

In case of hypothecation, possession of goods is not given to the bank. The goods remain at the disposal and in the god owns of the borrower. The bank is given access to goods whenever it so desires. The borrower furnishes periodical return of stock with him to the bank. The bank grants such an advance only to a person in whose integrity it has full confidence.

Webster Dictionary Meaning

1. Hypothecation
- The act or contract by which property is hypothecated; a right which a creditor has in or to the property of his debtor, in virtue of which he may cause it to be sold and the price appropriated in payment of his debt. This is a right in the thing, or jus in re.
- A contract whereby, in consideration of money advanced for the necessities of the ship, the vessel, freight, or cargo is made liable for its repayment, provided the ship arrives in safety. It is usually effected by a bottomry bond. See Bottomry.
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