Legal Definitions - Pledge

Definition: A pledge is a promise or a commitment to do something. It can also refer to a type of security interest where a lender takes possession of personal property as collateral for a loan. The personal property involved is also called a pledge. Initially, the lender's possessory interest is subject to the rules of a bailment or other type of deposit. If the borrower fails to perform as agreed, the lender may sell the personal property and keep the proceeds.

• When you join a fraternity or sorority, you may be required to take a pledge to uphold the values and traditions of the organization.
• John needed a loan to start his business, so he pledged his car as collateral. If he fails to repay the loan, the lender can sell the car to recover the money.

The examples illustrate the two different meanings of the term "pledge." In the first example, a pledge is a promise or commitment to follow certain rules or values. In the second example, a pledge is a type of security interest where personal property is used as collateral for a loan. In both cases, the pledge represents a binding agreement between two parties.