This week’s word of the week is caution, and no, I don’t mean a warning or admonition. I stumbled upon this term in the context of loans and securities. And while I cannot quote context for confidentiality reasons, I can tell you that it found its way to my computer via a client in England. So, I’m not dealing with American English this time. I can also clarify that it was not abundance of caution as one would typically find in an American text dealing with collateral.
Black’s Law defines caution in Civil and Scots law as: “security given to ensure performance of some obligation.” After further research, I found that while in Scotland caution is security for a deed or a debt or for the administration of a trust estate, in England and Wales the word also refers to land charges in the Register of Mortgages. Meanwhile, in Ireland, it refers to a restriction on disposition by the registered owner of land without notice to a person who claims any right in, to or over registered land or a registered charge. One word, so many variations.
In Spanish-speaking Civil Law countries, our closest equivalent is fianza, which if viewed as a commitment to guarantee the execution of a contract or the administration of a trust, is consistent with Black’s definition of caution.