Pledgor

A pledgor is the party that pledges property as security for an obligation, typically a debt or performance of a duty. In a pledge, the pledgor delivers possession of specific goods to the pledgee to secure the obligation. Ownership generally remains with the pledgor, while the pledgee holds the property as security until the obligation is fulfilled.

Pledges constitute a form of security interest created by bailment or collateral arrangement. They are commonly used for movable property such as inventory, equipment, jewelry, or stocks. Pledges can be created under common law or statutory regimes, and are often perfected by possession, though some jurisdictions use filings or other mechanisms for certain types of collateral.

On default, the pledgee typically may dispose of the pledged property after providing proper notice and in accordance with applicable law. Proceeds from the sale are applied to the indebtedness, with any surplus returned to the pledgor; the pledgor may redeem the asset by paying the outstanding amount and costs. The pledgor bears the risk that the collateral may not fully cover the debt, and that a sale could be challenged if conducted improperly.

Pledgor is contrasted with pledgee, the lender or secured party. The term is primarily used in secured transactions and collateral arrangements, with the precise rights and duties of the pledgor defined by applicable law and the terms of the pledge agreement, which can vary across jurisdictions and transaction types.