væðið

Væðið is a term used in Icelandic law to refer to a pledge or collateral. It is a security interest granted over movable property to secure the performance of an obligation, typically a debt. The concept of væðið is rooted in ancient Icelandic law and has evolved over centuries.

Essentially, when a væðið is established, the debtor (pledgor) transfers possession of the property to the creditor (pledgee) as security. If the debtor defaults on their obligation, the creditor has the right to sell the pledged property and use the proceeds to satisfy the debt. The property can include a wide range of movable items, such as livestock, goods, or even ships.

The legal framework surrounding væðið is detailed, specifying the requirements for its creation, the rights and obligations of both parties, and the procedures for enforcement. Historically, væðið played a significant role in facilitating credit and trade in Icelandic society. Modern Icelandic law continues to recognize and regulate the use of væðið, although its application and specific forms may differ from historical practices. The underlying principle remains that of providing a creditor with a tangible asset as assurance against non-payment.