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Interests Considered as Forms of Security

The registered pledge, as a limited proprietary right of an accessory character may secure an interest flowing from different contractual relationship. To the contrary, a leasing agreement and a title reservation agreement (conditional sale) may be regarded in Polish law as forms of securities in so far as they safeguard the performance in the contract of leasing or sale respectively. Furthermore, the pledge, including the registered pledge, is effective against third parties. Rights under the conditional sale contract, as well as leasing, have an relative character, i.e. they are effective solely between the parties to that contract. An exception is made for the conditional sale. According to art. 590 of the Polish Civil Code if the object is released to the buyer the reservation of ownership shall be confirmed in writing. It shall be effective with respect to the buyer’s creditors if it has an authenticated (certified) date. Moreover, a general exception to the inter partes efficacy exists when conclusion of some contract makes impossible to fulfill partially or in whole a claim of a third party, that party may demand such contract being ineffective towards himself, provided that the parties knew of his claim or the contract was gratuitous (art. 59 of the Polish Civil Code). To conclude, one can argue that in an economic sense as far as it concerns movable objects all three institutions: pledge, conditional sale and leasing provide forms of security interest. Yet, such effect is served primarily by rights having the erga omnes effect as the pledge and the registered pledge. The agreements of leasing and conditional sale have the inter partes effect with possibility of extending it in cases of conditional sale if a reservation of title is carried out in a special form.

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