Vargas, Jesica S. Atty.

Ocampo

BSA II-12 May 21, 2020

CREDIT TRANSACTIONS

PRE- ASSESSMENT

This is a short activity to stimulate your curiosity in the study of the topics under this
module.

It is your duty to answer this pre-assessment activity diligently and with all honesty.

Short Activity:

1. What is your understanding of the word “credit transaction”?

All transactions involving the loan or purchase of goods, services, or

money in the present with a promise to pay or deliver in the future.

2. TRUE or FALSE. There are two types of contracts of security?

Yes. The two types of contracts of security are

a) Personal- fulfillment by the principal debtor is secured only by a promise

to pay or the personal commitment of another
Examples: Guaranty and surety

b) Real- supported by a collateral or an encumbrance of property

Examples: Pledge, chattel mortgage, real estate mortgage, antichresis

3. What is your understanding of the word “bailment”?

Delivery of property of one person to another in trust for a specific

purpose, with a contract, express or implied, that the trust shall be
faithfully executed and the property returned or duly accounted for when
the special purpose is accomplished or kept until the bailor reclaims it.
Activity:

1. Define “pledge”

Pledge is a contract by virtue of which the debtor delivers to the creditor or to a

third person a movable or document evidencing incorporeal rights for the purpose
of securing fulfillment of a principal obligation with the understating that when the
obligation is fulfilled, the thing delivered shall be returned with all its fruits and
accessions.

2. Who are the parties in a bailment contract?

a) Bailor- the giver, or the party who delivers possession or custody

of the thing.

b) Bailee- the recipient, or the party who receives possession or custody

of the thing.

3. Illustrate an example of a secured credit transaction.

Aera bought a new car, she borrowed money from a bank for a car loan. Her loan
is a secured transaction. Aera’s bank is the secured party and owns a security
interest in the car. The car served as the collateral for the loan. If Aera failed to
make payments, her bank can repossess, or take the car in order to settle her debt.

4. What is “security”?

Security is defined as something given, deposited, or pledged to make certain the

fulfillment of an obligation. It ensures the enforcement of an obligations.