Examples of typical guarantees are shares, livestock and vehicles. A guarantee contract is not used to transfer shares of real estate (land / real estate) but only in personal property. The document used by lenders to obtain a right of pledge on real estate is a mortgage or trust deed. A guarantee agreement may be oral if the party (the lender) is in physical possession of the security rights. If the collateral is physically held by the borrower or if the collateral is immaterial (e.g.B a patent.  in the case of a claim or a certificate of claim), the guarantee contract must be made in writing to comply with the Fraud Act. The security contract must be certified by the debtor, i.e. it must either bear the debtor`s signature or be marked electronically. It must contain an appropriate description of the security rights and use words that show the intention to create a guarantee right (the right to demand repayment of the loan by attachment of the guarantees).
For the collateral contract to be valid, the borrower must normally have rights to the security rights at the time of performance of the contract. If a borrower mortgages as collateral a car belonging to a neighbor and the neighbor does not know and approves of this promise, then the security agreement is inoperative. . . .