Topics of Law Test 51

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Topics of Law Test 51

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Weekly Quiz Competition

Question 1
1 / -0

A specific guarantee is ______.

A
Irrrevocable

B
Revocable

C
Transferable

D
Not a guarantee at all
Question 2
1 / -0

Which of the following can be revoked?
1. A continuing guarantee
2. Specific guarantee
Select the correct answer from the options given below -

A
Both 1 and 2

B
Neither 1 or 2

C
l but not 2

D
2 but not l

Solution

Section 130 of the Indian Contract Law,1872 talks about Revocation of continuing guarantee. "A continuing guarantee may at any time be revoked by the surety, as to future transactions, by notice to the creditor."
Question 3
1 / -0

After discharging the debt, the surety ________.

A
Steps into the shoes of the creditor

B
Is subrogated to all the rights of the creditor against the principal debtor

C
(A) or (B)

D
None of the above

Solution

Right of Subrogation: (Sec 140) – Right of a surety against principal debtor: Where a guaranteed debt has become due, or default of the principal debtor to perform a guaranteed duty has taken place, the surety upon payment or performance of all he is liable for, is invested with all the rights which the creditor had against the principal debtor. A surety is thus, upon the payment of the guaranteed sum or on performance of a guaranteed duty, subrogated or invested with all the rights which the creditor had against the principal debtor.

This arises on payment of the whole sum due or performance of the entire duty. Surety steps into the shoes of the creditor. Surety may now sue the principal debtor in as much as the creditor had the right to sue the principal debtor.
Question 4
1 / -0

Identify which of the following statement is true and which is false?
P. A surety is favoured creditor.
Q. The liability of the principal debtor is co-extensive with that of surety unless the contract otherwise provides.
Select the correct answer from the options given below -
P Q

A
True False

B
False False

C
True True

D
False True

Solution

Sector 133 states "Discharge of surety by variance in terms of contract.—Any variance, made without the surety’s consent, in the terms of the contract between the principal and the creditor, discharges the surety as to transactions subsequent to the variance and Section 126 talks about ‘Contract of guarantee’, ‘surety’, ‘principal debtor’ and ‘creditor’—A ‘contract of guarantee’ is a contract to perform the promise, or discharge the liability, of a third person in case of his default. The person who gives the guarantee is called the ‘surety’; the person in respect of whose default the guarantee is given is called the ‘principal debtor’, and the person to whom the guarantee is given is called the ‘creditor’.
Question 5
1 / -0

The liability of surety is ______.

A
Primary

B
Collateral

C
Secondary

D
(B) or (C)
Question 6
1 / -0

On payment of a guaranteed debt, surety is subrogated to all the rights of _______.

A
Creditor

B
Principal debtor

C
Other co-surety

D
None of the above

Solution

After the payment of the debt to the creditor, the surety is subrogated to the rights of the creditor i.e., he has the same rights as those of the creditors. Therefore, he can sue the principal debtor to exercise those rights. Thus if the surety has performed his promise towards the creditor, all the rights of the principal debtor against the creditor devolve upon him.
Question 7
1 / -0

In which of the following circumstances a continuing guarantee can be revoked?

A
By notice of revocation by the surety

B
By the death of the surety

C
Both (A) & (B)

D
None of the above

Solution

Section 130 of the Indian Contract Law,1872 talks about Revocation of continuing guarantee.—A continuing guarantee may at any time be revoked by the surety, as to future transactions, by notice to the creditor." and Section 131 of Indian Contract Act, 1872 talks about "Revocation of continuing guarantee by surety’s death.—The death of the surety operates, in the absence of any contract to the contrary, as a revocation of a continuing guarantee, so far as regards future transactions."
Question 8
1 / -0

The liability of indemnifier is _______.

A
Primary

B
Collateral

C
Secondary

D
(B) or (C)
Question 9
1 / -0

On being sued by the creditor, the surety can rely on any _____ which the debtor has against the creditor.

A
Set-off

B
Counter claim

C
Set-off or counter claim

D
None of the above

Solution

Sometimes, the principal debtor is entitled to certain counter claim or deductions from the loan obtained from the creditor. In such cases, the surety is entitled to the benefit of such counter claim or deductions, if the creditor files a suit against the surety.
Question 10
1 / -0

In contract of bailment, delivery may be_______.

A
Actual

B
Constructive

C
(A) or (B)

D
None of the above

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Re-Attempt Weekly Quiz Competition

Topics of Law Test 51

Result

Topics of Law Test 51

Score

-

Rank

-

SHARING IS CARING

Question 1

Irrrevocable

Revocable

Transferable

Not a guarantee at all

Question 2

Both 1 and 2

Neither 1 or 2

l but not 2

2 but not l

Solution

Question 3

Steps into the shoes of the creditor

Is subrogated to all the rights of the creditor against the principal debtor

(A) or (B)

None of the above

Solution

Question 4

True False

False False

True True

False True

Solution

Question 5

Primary

Collateral

Secondary

(B) or (C)

Question 6

Creditor

Principal debtor

Other co-surety

None of the above

Solution

Question 7

By notice of revocation by the surety

By the death of the surety

Both (A) & (B)

None of the above

Solution

Question 8

Primary

Collateral

Secondary

(B) or (C)

Question 9

Set-off

Counter claim

Set-off or counter claim

None of the above

Solution

Question 10

Actual

Constructive

(A) or (B)

None of the above

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My Perfomance

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Rank

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