letter of hypothecation |
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Definition
Written agreement, which authorizes a bank or lender to repossess and sell the pledged item in case of a default. In international trade, a letter of hypothecation enables an accepting bank to sell the shipment in case of the non-acceptance or non-payment of the associated bill of exchange by the buyer.
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letter of hypothecation is in the Banking, Commerce & Finance and International Trade & Relations subjects.
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