Quiz on Contract of Guarantee and Bailment

Which of the following is NOT a remedy available to a creditor in a contract of guarantee?

• Suing the principal debtor

• Suing the surety

• Seizing the property of the surety

• Suing both the debtor and surety

Which of the following terminates a continuing guarantee?

• Revocation by the surety

• Death of the surety

• Completion of all transactions

• All of the above

The surety's liability is secondary to:

• Principal debtor's liability

• Creditor's liability

• Indemnifier's liability

• None of the above

Which of the following can be considered a valid consideration in a contract of guarantee?

• Past debts

• Future loans

• A promise made

• All of the above

The death of the surety results in:

• Discharge of the contract

• Continuation of the contract

• Discharge of future liabilities

• No change

Which of the following is an implied promise by the surety?

• To indemnify the principal debtor

• To indemnify the creditor if the debtor defaults

• To guarantee any future contracts

• To share liability equally

A contract of guarantee involves which of the following?

• A promise to pay for goods

• A promise to answer for someone else's default

• A promise to compensate for damages

• A promise to sell property

Which section of the Indian Contract Act deals with the rights of a surety on the discharge of his liability?

• Section 140

• Section 141

• Section 142

• Section 143

In the absence of a principal debtor's consent, can a creditor extend the time of payment and bind the surety?

• Yes, always

• No, the surety is discharged

• Yes, if agreed upon earlier

• No, unless the surety gives consent

If a guarantee is obtained by misrepresentation, it is:

• Voidable at the option of the surety

• Void

• Enforceable

• Valid for certain transactions