Credit Transactions – Reviewer
accommodation)
Four basic economic units:
 Household
 Business organizations
 Government
 Foreign investors
Credit – may be employed to denote financial
accommodation of some kind; that is, the
provision of a benefit (cash, land, goods,
services or facilities) for which payment is to be
made by the recipient in money at a later date.
Broader concept, credit transactions –
transactions whereby money or property is
extended or delivered to another by a lender or
bailor on the belief, confidence or trust that the
borrower or bailee will return the same.
Other concepts, CREDIT:
Obligations – option of a person to demand a
patrimonial prestation, and which the law will
enforce
Accounting – bookkeeping entries that decrease
asset or expense account balances and increase
liability, owner’s equity, or revenue account
balances. Asset which is simply money owing or
due to one person or entity.
Business reputation – credit of an individual
means his ability to borrow money by virtue of
the confidence or trust reposed by a lender that
he will pay what he may promise.
Kinds of Credit Transactions (as a financial
 Loan - includes simple loan (mutuum) in
whatever form including bank loans and
overdrafts, credit card transactions, etc
 Price Deferment Agreements – includes sale
on credit
 Financial Leases – mode of extending credit
through a non-cancellable
Bailment contracts – delivery of the personal
property by the bailor for some particular use or
on a mere deposit, upon a contract, express or
implied, that after the purpose has been
fulfilled, it shall be delivered back to the bailor,
or otherwise dealt with according to the
directions of the bailor or kept until the latter
reclaims it, as the case may be.
- Includes commodatum (for use) and
deposit (for safekeeping)—both
contracts involve the delivery of
property to another person although
for different purposes.
- No fiduciary relationship is created by a
bailment, not accurate to refer to the
transfer as “in trust”—no trustee-
beneficiary relationship is created.
Kinds of Bailment