Definition - What does Pledge mean?

A pledge is a guarantee to relinquish an asset, usually cash, if an agreement is not held as planned. A cosigner on a loan pledges to uphold the payments if the borrower does not uphold their agreed payment plan.

Another type of pledge is in a pawn shop, where a person takes in an asset and accepts money in exchange for a pledge that they will come back in the future and repay the money and pick up their asset.

Justipedia explains Pledge

A pledge is legally binding and will be held as such in a court. If a cosigner pledges to make payments on a borrower's behalf if they default, and then does not pay when they are called upon to do so, they can be sued in the same way as the borrower for recompense of the agreed funds.

Share this:

Connect with us

Find a Lawyer