Prohibition of Taking Agency from Manufacturing Borrowers

The manufacturer may not be able to personally procure needed capital, so he may go to money market to meet it. Banks and financial and credit institutes make loan to manufacturer and if the sum of loan is more than ascertained amount, they demand mortgage in order to be assured that they are able to collect the loan in the case of borrower’s default. Given that the legal rules governing pawn requires pawnee to act through authorities to sell security and collect the credit if the borrower does not repay the loan, the lenders tried to circumvent the rule by taking agency and personally sell the security. Legislator has apparently decided to protect manufacturer by prohibiting irrevocable agency, whereas the rule is not necessary and it can be said that its enactment amounted to ambiguity and uncertainty, because the Registeration Act has previously banned it and annulling agency has been common in the case law.