If they have neglected to do this, they must suffer the consequence of being subordinated to the lender’s security interest

If they have neglected to do this, they must suffer the consequence of being subordinated to the lender’s security interest

Under modern economic conditions it is rarely feasible to deprive the borrower of charged goods, as the rise of no-pledge security interests demonstrates. But the goods frequently do not even rest in the borrower’s hands. This is especially likely to be the case if the borrower is a trader; he will probably want to sell the goods that he has charged. A manufacturer may similarly wish to replace charged machinery. In these instances the need arises to allow the borrower the desired disposition of the goods and at the same time to maintain the lender’s security interest. Continue reading “If they have neglected to do this, they must suffer the consequence of being subordinated to the lender’s security interest”