When is a pledge not a pledge?

When is a pledge not a pledge?

PLEDGES ARE PROMISORY COMMITMENTS WE MAKE TO OTHERS WITH THE INTENT TO REALISE THEM IN THE FUTURE.

But, when is a pledge not a pledge? When it is impacted by a force majeure.

My Maternal grandfather said “…you never really know a person until they are asked to show the colour of their money.”  And he meant the person’s own money rather than financial support from an institution, company, university, not-for-profit, small business or government department. If they promise and then don’t deliver, then common sense requires that we deter detractors and malefactors because they do not act for the public good. If they have pulled out of a pledge due to their own business malice, their modus operandi is seen as self-centred and selfish.PledgePledge

However, some people experience a force majeure (Act of God/superior force) or unexpected hardships or unforeseeable circumstances that prevents them from fulfilling a contract or pledge. The surprise event was beyond their control – as a chance occurrence – which prevents them from meeting their financial or resource support. As a result, they cannot continue with their pledge. This is often called ‘the best laid plans of mice and men’.

PledgeUnfortunately the pledger bears a cross twice: firstly, for the effect of the force majeure as a disruptor of their daily activities. Secondly, in needing, or being forced, to explain the deficit between the reality of non-payment or only partial payment and the previously-held expectation of full payment. The person is caught in a dilemma which means they need to confer and revise their plans.

It is why Acts of Grace exist in financial accounting. The Acts of Grace cover unexpected inabilities of someone to meet a pledge.  It exempts the contracting parties from fulfilling their contractual obligations because of an unexpected occurrence outside their control. The person or organisation who has been pledged the money acts in a graceful manner (gives an act of grace) and does not descend into frustrated behaviour designed to bully the debtor into further payments.Cross

In essence, the Act of Grace absolves the debtor of the debt. The one promised more than the debtor can pay shows that they accept the force majeure situation. Further, they do not use their position of power to attempt to exhort or steal life or livelihood from the debtor. Nor do they malign, slander or defame the debtor. To do so would show lack of perspective as they too might one day be in the debtor’s position carrying a large cross. This is what my Grandfather the accountant taught me at his knee. We all have a cross to bear and sometimes the cross is in trying to understand the other person’s situation without judgment.

Text copyright Fiona Rothchilds September 2018.
Photo copyrights Fiona Rothchilds 2015-18.
Uploaded 30 September 2018.

Comments are closed.

Sign in
classic
Forgot password?
×
Sign up

(*) Required fields

I agree with OptimaSales Terms & Privacy Policy

×