hypothec

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hypothec

a security over moveable property that permits the borrower to retain possession. A hypothec is equivalent to a charge and is employed in international trading transactions. A letter of hypothecation is a letter addressed to a bank giving details of a shipment of goods relating to a draft. Should the draft be dishonoured, the bank is empowered to sell the goods. Maritime liens are a form of hypothec. Seamen have a lien for wages; a salvor for any sum due on salvage; a person repairing a ship or giving supplies in a foreign port for the services; one suffering loss as a result of damage caused by the ship. Claims under bonds of BOTTOMRY and RESPONDENTIA are secured by hypothec.

In Scotland special hypothecs are known:

  1. (1) the landlord's hypothec is a security over the invecta et illata (things brought or carried into the premises) subject to recognized exceptions in respect of one year's rent and not for prior arrears. The security will attach goods on hire or hire purchase;
  2. (2) the feudal superior's hypothec for feu duty, of little significance since for some time feu duties have been statutorily redeemed and the feudal system has been abolished by the Abolition of Feudal Tenure Act 2000;
  3. (3) a solicitor has a hypothec over any expenses to which his client is entitled;
  4. (4) the maritime hypothecs mentioned in respect of England are recognized in Scotland too.
References in periodicals archive ?
If the sale price is insufficient to pay all those having registered a valid legal hypothec of construction, these hypothecs will rank concurrently among themselves.
To those entitled by their participation in the construction of an immovable, the law gives a Legal Hypothec, which means:
If demolition work is necessary for the purpose of a construction project, such work will also give rise to a legal hypothec of construction.
The civil code gives an exclusive list of those entitled to a legal hypothec of construction, and those are:
The architect whose plans and/or specifications have been used in said construction (if plans or specifications are not used by the owner for the said construction, no legal hypothec of construction is possible);
The engineer whose plans and/or specifications have been used in said construction (if plans or specifications are not used by the owner for the said construction, no legal hypothec of construction is possible);
The supplier of materials will also be entitled to a legal hypothec of construction for materials specially prepared for the construction, even though the materials are not incorporated to the works or even delivered on the job site if they are specially fabricated for said project.
Conditions to Acquire the Right to the Legal Hypothec of Construction:
If those entitled to a legal hypothec of construction have entered into a contract directly with the owner or his representative, no Notice to Owner is necessary.
If those entitled to a legal hypothec of construction do not have a contract directly with the owner, they have the obligation to Notify the Owner in writing that they have been given a contract by the general contractor or subcontractor or by any party other than the owner.
It is important that the owner receive the notification before the beginning of the works in order to ensure that the legal hypothec of construction will be valid for the full unpaid amount of the contract.
The various devices other than prior claims and hypothecs mentioned above as reflecting the third dimension of Payette's expanded view of secured transactions should be considered simply as further attenuations to the equality of creditors principle.