PAPER NO. 8 LAW GOVERNING CREDIT PRACTICE
GENERAL OBJECTIVE
This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable him/her to apply legal principles in credit management decisions.
LEARNING OUTCOMES
A candidate who passes this paper should be able to:
- Identify the securities available in lending
- Comply with the procedures applicable on securities contracts
- Identify the rights and duties of lenders and borrowers
- Demonstrate knowledge of bankruptcy and insolvency law as it applies to credit management.
CONTENT
Introduction to securities
- Meaning of a security
- Types of securities
- Advantages and disadvantages of collaterals
- Formation of a contract
- Qualities of a good security
- Enforcement and perfection of securities
Land as security
- Meaning of land
- Land tenure: freehold and leasehold
- Advantages and disadvantages of land as security
- Creation of charges and mortgages
- Procedure for perfecting title to land as security
- Rights and duties of the parties to a charge and mortgage
- Remedies
- Release of security
Intellectual property as collateral
- Meaning of intellectual property
- Types of intellectual property
- Procedures for perfecting a security interest in intellectual property
- Advantages and disadvantages of using intellectual property as collateral
- Rights and duties of the parties
- Remedies
- Discharge of security
Guarantees and indemnities
- Meaning and characteristics
- Formation
- Parties
- Rights and duties of the parties
- Termination of contract of guarantee and indemnity
- Advantages and disadvantages of guarantee and indemnity as security
Bailment, pledge and lien
- Meaning and characteristics
- Formation, rights and duties of the parties
- Remedies for breach termination
Corporate securities
- Meaning and characteristics
- Debentures
- Remedies of a debenture holder
- Charges
- Shares and Corporate bonds
- Common clauses incorporate bonds
Government borrowing
- Treasury Bills
- Treasury Bonds
- Borrowing by County Government
- Debt recovery by litigation
Bankruptcy
- Meaning
- Acts of bankruptcy
- Bankruptcy proceedings
- Rights of creditors
- Consequences of bankruptcy
- Discharge of a bankrupt
Insolvency
- Meaning of Insolvency
- Receivership
- Types of liquidation
- Official Receiver/Liquidator
- Committee of inspection
- Distribution of assets
- United Nations Commission on International Trade Law UNCITRAL) legislative guide on Insolvency Law
- United Nations Commission on International Trade Law (UNCITRAL) model law) on cross border listing
- World Bank Principles and Guidelines for Effective Insolvency and Creditor Rights Systems
Emerging issues and trends