Common use of Surrender of Collateral Clause in Contracts

Surrender of Collateral. The bank may surrender collateral or the other third-party pledge lodged in security for the principal debt without the pledgor’s liability diminishing thereby. For a justified reason, the bank may surrender the pledge, owned by the debtor and lodged in security for the principal debt, without the third-party pledgor’s permission even if the bank did not receive a payment for the debt or replacement collateral security. In such a case, the pledgor’s liability does not diminish. If the collateral is a deficiency pledge, surrendering a primary pledge will not increase the third-party pledgor’s liability unless he/she has given his/her consent to the surrender of the pledge.

Surrender of Collateral. The bank may surrender collateral or the other third-third party pledge lodged in security for the principal debt without the pledgor’s liability diminishing thereby. For a justified reason, the bank may surrender the pledge, owned by the debtor and lodged in security for the principal debt, without the third-third party pledgor’s permission even if the bank did not receive a payment for the debt or replacement collateral security. In such a case, the pledgor’s 's liability does not diminish. If the collateral is a deficiency pledge, surrendering a primary pledge will not increase the third-third party pledgor’s liability unless he/she he has given his/her his consent to the surrender of the pledge.