Collateral Agreement Theory

We show that buy-back contracts (rest) appear to be an instrument of choice for borrowing in a competitive model with limited commitment. The balanced repurchase agreement provides insurance against fluctuations in the price of assets in countries with high collateral value and maximizes borrowing capacity when it is low. The discounts increase with both counterparty and asset risk. In balance, lenders opt for the reuse of collateral. This increases the flow of the asset and creates a “collateral multiplier” effect. Finally, we show that intermediation by dealers can form endogenous in balance, with rest chains among distributors. A support contract is usually a one-time contract which, taking into account the party whose benefit is exploited by the contract, enters into the main or principal contract, which sets additional conditions for the same purpose as the main contract. [1] For example, an ancillary contract is entered into when one party pays the other party a certain amount for entry into another contract. An ancillary contract may be entered into between one of the parties and a third party. The project must have specifically or tacitly requested the main contract and its declaration of forgiveness must have motivated the inclusion of the other party in the main contract. [4] According to Lord Denning MR, a support contract is considered binding “when a person gives a commitment or assurance to another who intends to react by entering into a contract.” [5] In the English case Barry v Davies, it was found that an auctioneer and a buyer had entered into a secondary contract.

[13] It has been found that, although the main contract does not concern the incense, the benefits granted to the bid represent a good consideration for the increase in the price of the offer. [13] A theory confirms that it is possible to qualify the establishment of an auxiliary contract for a third-party beneficiary, since the letters of credit are driven by the need of the purchaser and, in according the theory of Jean Domat, the origin of a letter of credit, that a bank issues a credit in favour of a seller in order to exempt the buyer from his obligation to pay directly to the seller with a legal offer. There are three different companies involved in the letter of credit transaction: the seller, the buyer and the banker. Therefore, an accreditation contract is theoretically understood as a guarantee contract, which is accepted by a behaviour or, in other words, as a tacit contract. [8] It will soon be referred to as Part LOC A to an existing contract, in order to demonstrate the existence of a secondary contract if its right to the infringement is rejected because the statement on which they were based was not considered to be the duration of the main contract. It was decided that the explanation must have been so successful. [2] In the event of a breach of a security contract, corrective action may be taken.