Legal Definitions - gage

Gage (noun)

A "gage" refers to something, such as an item, money, or a formal promise, that is given or held as security to ensure that a specific obligation or agreement will be fulfilled. It acts as a form of collateral, providing assurance that if the primary obligation is not met, the party holding the gage has recourse.

Gage (verb)

To "gage" means to provide or deposit something as security or a pledge for the performance of an obligation.

Here are some examples illustrating the term:

• Example 1: Pawning a Valuable Item

  Imagine someone needs a short-term loan and visits a pawnbroker. They leave a valuable antique watch with the pawnbroker as security for the loan amount. If the loan is repaid within the agreed timeframe, the watch is returned. If not, the pawnbroker can keep and sell the watch to recover the loan.

  How it illustrates: In this scenario, the antique watch serves as the gage (noun). The act of depositing the watch with the pawnbroker is an example of gaging (verb) the watch to secure the loan.

• Example 2: A Security Deposit for a Rental Property

  When a tenant moves into an apartment, they typically pay a security deposit to the landlord. This money is held by the landlord throughout the tenancy. If the tenant causes damage beyond normal wear and tear or fails to pay rent, the landlord can use this deposit to cover those costs. If the tenant fulfills all their obligations, the deposit is returned.

  How it illustrates: The security deposit functions as a gage (noun) provided by the tenant. It assures the landlord that potential damages or unpaid rent can be covered. The tenant gages (verb) their responsibility for the property by providing this deposit.

• Example 3: A Performance Bond for a Construction Project

  A city government hires a construction company to build a new public library. To ensure the project is completed on time and according to specifications, the city requires the construction company to provide a performance bond. This bond is a guarantee from a third-party surety company that if the construction company fails to meet its contractual obligations, the surety company will step in to complete the work or compensate the city.

  How it illustrates: The performance bond acts as a gage (noun) from the construction company, providing the city with security against potential non-performance. The construction company effectively gages (verb) its commitment to the project's successful completion through this bond.