TRUST RECEIPTS

Authors

Abstract

That the conflict between the convenience of business and the rigidity of the law continually brings about modifications and expansions of legal doctrine is nowhere better illustrated than in the field of commercial financing. A merchant wishes to purchase goods; he has no funds or available unencumbered property for security; his general credit is too poor to warrant either the manufacturer or a bank in making advances without security. How can the manufacturer give the merchant possession and power of sale of the goods and yet retain a legal hold on them or their proceeds as security for the payment of the purchase price? The solutions of this problem -- by no means a novel one in the business world -- have been manifold in their variations, though of a few main general types. As between the parties, the advantages of one form of security over another are not very marked; but as to the security creditor's rights against third persons, the form of the transaction may become all-important.

Recommended Citation

TRUST RECEIPTS, 31 Mich. L. Rev. 558 (1933).
Available at: https://repository.law.umich.edu/mlr/vol31/iss4/10