Pawn Legal Meaning and Definition

Here is a simplified definition of the legal term Pawn.

Pawn (noun): A pawn refers to a valuable item or personal property that a person hands over to a pawnbroker as a security or collateral for a loan. If the borrower fails to repay the loan, the pawnbroker will have the right to sell the pawned item to recover the loan amount. These transactions often involve small loan amounts and high-interest rates and are regulated by the government.