Free Pledge Agreement Template Samples

 To help you grow your business, we have created a fairly simple but reliable pledge agreement template in both Word and PDF versions so you can use it over and over.

What is a pledge contract?

A pledge agreement is a legally binding document to deliver personal property to another as pledge or security for a debt. Collateral is typically used to secure loans, pledge goods for cash, and guarantee that contract work will be performed.

Items that can be pledged are:

• Jewelry

• Precious metals

• Watches

• Fire arms

• Electronic

• Power Tools

• Musical instruments

• Sporting goods, such as bicycles

These and many others can be pawned depending on their resale value.

What is pledging?

Pledging is a process by which a person or company asks a broker or a bank to keep their silver objects, such as jewellery, gold bars, old coins, gold trinkets, safes, etc. in their safe, waiting for her to retrieve these items. This allows individuals to have access to their needed money in their time of need.

This is a lease contract and not a purchase contract, because the pledged objects remain the property of the owner.

One of the essential advantages of this pawning is that the broker or the bank can give you money back if you have not recovered your objects. The conditions under which they do this vary between brokers or banks.

What are the types of pledge contracts?

There are two types of pledge contracts, i.e. short-term pledge and long-term pledge.

Short-term pledging is the pledging of an item for a short term, such as a week, a month, or a year. Brokers and banks require a deposit for any short-term pledge.

Long-term pledging is the pledging of an item for a longer period, such as six months or a year. Brokers and banks do not require a deposit for long-term pledging.

What are the differences between short-term pledging and long-term pledging?

There are two main differences. The first is that in long-term pawning, the pawned items remain the property of the owner, whereas in short-term pawning, the pawned items are the property of the brokers. The second is that in short-term pawning, the owner receives a deposit for each pawned item, while he does not receive any in long-term pawning.

Important Terms

What should a pledge agreement contain?

A pledge agreement must contain the following information:

• Le name and address of each party;

• La designation of the object pledged;

• La duration of the pledge, short-term pledge or long-term pledge;

• La effective date of the contract;

• La date and deposit amount for short-term pledge or deposit amount for long-term pledge;

• The date and amount of the payment for the short-term pledge or the amount of the payment for the long-term pledge;

• The right of recovery of the owner of the pledged property;

• If applicable, the name and address of the person who ensures the protection of the interests of the parties concerned.

What are the obligations of the parties?

The owner must:

• Keep the object pledged until the expiry of the contract;

• Make scheduled payments.

The lessor must:

• Reimburse the pledged property to the owner at the end of the contract;

• Issue a reimbursement receipt.

What are the pledger's obligations?

The bettor must:

• Pawn the object within the stipulated time;

• Specify the duration of the short-term pledge or the duration of the long-term pledge;

• Specify the date and the amount of the deposit for the short-term pledge or the amount of the deposit for the long-term pledge;

• Specify the date and amount of the payment for the short-term pledge or the amount of the payment for the long-term pledge;

• Specify the right of recovery of the owner of the pledged property.