239 of the Civil Code of the RA provides that pledgor shall bear the risk of accidental destruction, loss of or harm to a pledged property, unless otherwise provided for by the contract of pledge.
Pledgee shall be liable for complete or partial destruction, loss of or harm to the collateral transferred to him or her, unless the latter proves that he or she may be exempt from liability in accordance with Article 417 of the Code.
Pledgee shall be liable for loss of the collateral in the amount of its actual value, and for the harm thereto in the amount by which that value has been reduced, regardless of the amount the collateral has been assessed when being transferred to the pledgee.
When as a result of harm, the collateral transferred to the pledgee changes to the extent that it may not be used for its direct purpose, the pledgor shall have the right to renounce it and to require compensation for the loss thereof.
The obligation of the pledgee to compensate to the pledgor other damages caused by loss of or harm to the collateral may be provided for by contract.
The pledgor who is the debtor of the obligation secured by pledge shall have the right to set off the compensation for the damages caused by loss of or harm to the collateral for the purpose of redeeming the obligation secured by pledge.
