Calling All Secured-Transactions Lawyers: Issues Regarding Language Granting a Security Interest

I culled the following from a security agreement on EDGAR:

… SwissINSO hereby grants, assigns, conveys, mortgages, pledges, hypothecates and transfers to the Secured Party a lien on and security interest in, all of SwissINSO’s right, title and interest in, to and under, all of the property and assets currently owned by or owing to, or hereafter acquired by or arising in favor of, SwissINSO, wherever located …

I’d be pleased to have secured-transactions lawyers sound off on the following issues:

  • The string “grants, assigns, conveys, mortgages, pledges, hypothecates and transfers” seems way out of control. Why not just “grants”? For example, why “hypothecates”? Yes, I know that it means, in a nutshell, “to pledge without delivery of title and possession.” But consistent with what I said in this recent post, to accomplish a hypothecation, you don’t need to use that clunky word, thank goodness—instead, that’s determined by the terms of the deal.
  • And why use both “lien” and “security interest”? Are those meant to be synonyms? Or are two different rights being granted?
  • Why use “right, title and interest”? Why not just “interest”?  That seems the broadest term.
  • Do we really need “in, to, and under”?
  • What’s the difference between “property” and “assets”?
  • And do you get tired of dealing with this sort of verbiage?

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.