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There are different viewes concerning law merits and pledge
contract effect. Some publicists regard it as a type of "novation" while
others hold that the realization and achievement of pledge contract is "transfer of debt" from principal debtor's obligation on obligor's
obligation. Still others suppose that its merits is based on a kind of
"special transfer of debt". While making a comparison between pledge contract incorporated in the Civil Law and the two institutions of novation and transfer of debt, the peresent essay endeavours to present a new theoretical approach to this subject. Ultimately, I will conclude
that merits of pledge contract is a transfer of debt incorporated in
paragraph 2 of Article 292 of Civil Law.
Phrased differently, merits of pledge contract is both "novation" and "transfer of debt" as understood under our municipal law rather than
other national laws.