Establishment of a collateral in the form of a financial pledge

The functioning of an entrepreneur on the financial services market is associated with the necessity to conclude contracts the subject of which is: the right to receive a given sum of money from the other party (including a refund of the financing granted), or to provide specific financial instruments to the other party. Their implementation is often associated with the risk that the other party to the contract will not fulfil the obligation to which it has committed.

To mitigate the risk of avoiding the execution of such an agreement by its other party, legal solutions were established whose purpose is to secure the execution of contracts on the financial market. Thanks to them, the entity providing financial services has higher certainty of pursuing its interests, as long as it takes care of introducing appropriate safeguard clauses to the contract.

The type of collateral that should be chosen in a given case depends not only on the will of the parties, but also on the type of contract to be secured or specific provisions affecting the possibility of establishing a specific collateral.