The Collaborative International Dictionary of English v.0.48:

Wadset \Wad"set\, n. [Scot. wad a pledge; akin to Sw. vad a
   wager. See Wed.] (Scots Law)
   A kind of pledge or mortgage. [Written also wadsett.]
   [1913 Webster]

Bouvier's Law Dictionary, Revised 6th Ed (1856):

WADSET, Scotch law. A right, by which lands, or other heritable subjects,
are impignorated by the proprietor to his creditor in security of his debt;
and, like other heritable rights, is perfected by seisin.
     2. Wadsets, by the present practice, are commonly made out in the form
of mutual contracts, in which one party sells the land, and the other
grants, the right of reversion. Ersk. Pr. L. Scot., B. 2, t. 8, s. 1, 2.
     3. Wadsets are proper or improper. Proper, where the use of the land
shall go for the use of the money. Improper, where the reverser agrees to
make up the deficiency; and where it amounts to more, the surplus profit of
the land is applied to the extinction of the principal. Id. B. 2, t. 8, s.
12, 13.