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WorksheetsContract of Guarante, bailment, pledge and agency
Total questions: 113
Worksheet time: 57mins
The person in respect of whose default, the guarantee is given is called…………
Principal debtor
Principal creditor
Principal surety
Principal bailee
Which type of guarantee is given for series of transaction?
General guarantee
Implied guarantee
Continuous guarantee
General and continuous guarantee
The contract of Guarantee should be ………..
Implied
only written
only oral
written or oral
Liability of surety is……….
Secondary liability
Preliminary liability
Subsidiary liability
Co-related liability
On whose default, the promise of discharge of liability is given in contract of guarantee.
Principal debtor
Subsidiary debtor
Principal guarantor
All above
In case of co-sureties, release of one surety by the creditor:
Amounts to discharge of other sureties
Does not amount to discharge of other sureties
Amounts to discharge of the surety so released vis-a-vis co-sureties as well
None of the above
A contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person, is called----
Indemnity
Guarantee
Agency
Bailment
Section-125 of the ICA,1872 deals with ------
Rights of indemnity-holder
Continuous guarantee
General guarantee
Implied guarantee
Section-126 of the ICA,1872 deals with ------
Consideration for guarantee
Surety
Principal debtor
Creditor
The liability of the surety is co- extensive with that of ------------unless it is otherwise provided by the contract.
Principal debtor
Surety
Creditor
Co-surety
Revocation of continuing guarantee by surety's death is defined under --------section of ICA,1872.
Section-140
Section-130
Section-142
Section-132
__________ who are bound in different sums are liable to pay equally as far as the limits of their respective obligations permit.
Co-sureties
Creditor
Principal debtor
All the above
Implied promise to indemnify surety is defined under__________section of ICA,1872.
Section-146
Section-148
Section-147
Section-145
Guarantee on contract that creditor shall not act on it until co-surety joins.-
Section-145
Section-144
Section-143
Section-146
Any guarantee which the creditor has obtained by means of keeping silence as to material circumstances, is invalid. Under-------section.
Section-145
Section-144
Section-143
Section-146
Any guarantee which has been obtained by means of misrepresentation made by the creditor, or with his knowledge and assent, concerning a material part of the transaction, is invalid under -------section.
Section-145
Section-144
Section-143
Section-146
Section-138 of the ICA,1872 deals with ------
Rights of indemnity-holder
Release of one co-surety does not discharge others.
Surety's right to benefit of creditor's securities.
Implied guarantee
Assertion (A): A guarantee is a contract in which one party promises to discharge the liability of a third person in case the third person fails to fulfill their obligation. Reason (R): Under the Indian Contract Act, 1872, a guarantee involves three parties: the principal debtor, the creditor, and the surety (guarantor).
Both Assertion (A) and Reason (R) are correct, and Reason (R) is the correct explanation of Assertion (A).
Both Assertion (A) and Reason (R) are correct, but Reason (R) is NOT the correct explanation of Assertion (A).
Assertion (A) is correct, but Reason (R) is incorrect.
Assertion (A) is incorrect, but Reason (R) is correct.
A contract of Indemnity is ------
Void agreement
Quasi contract
Contingent contract
Wagering contract
A Contract of Guarantee is a--- -agreement
Bipartite agreement
Tripartite agreement
Either (A) or (B)
None of these
In a contract of Indemnity there are -
3 parties and one contract
2 parties and 2 contracts
3 parties and 3 contracts
2 parties and one contract
A surety can be discharged from his liability by --------
Notice
Death
Novation
All the above
The guarantee given for the future debt is---
Prospective
Retrospective
Continuing
None of the above
Guarantee on the good conduct or honesty of the person employed in the particular organizations is------
Fidelity
Prospective
Retrospective
Continuing
How many types of relationship arises in contract of guarantee?
3
4
5
2
-------- is a person employed to do any act for another, or to represent another in dealings with third persons.
Principal
Agent
Agency
All the above
No consideration is necessary to create an agency is defined under__________section of ICA,1872.
Setion-185
Section-186
Section-144
Section-145
Agent's authority may be --------or-------as per section-186 of ICA.
Expressed
Implied
Expressed or Implied
None of the above
Extent of agent's authority is defined under__________section of ICA,1872.
Section -186
Section-187
Section-188
Section-185
A "sub-agent" is a person employed by, and acting under the control of, ----------in the business of the agency
Agent
Substituted agent
Principal
Third parties
The seller delivers the goods at the port of destination insisted by the buyer is called ---
FOB contract
Ex-ship contract
FOR contract
CIF contract
Agent's responsibility for sub-agent appointed without authority is defined under __________section of ICA,1872.
Section-192
Section-193
Section-194
Section-195
Which section of the ICA deal with the substituted agent , duly appointed by the principal but not the sub-agent?
Section-192
Section-193
Section-194
Section-195
When an acts are done by one person on behalf of another, but without his knowledge or authority, he may elect to ratify or to disown such acts is called ------
Election
Contribution
Ratification
Rectification
Termination of sub-agent's authority is defined under__________section of ICA,1872.
Section-200
Section-205
Section-206
Section-210
Revocation and renunciation may be expressed or may be implied in the conduct of the principal or agent respectively is defined under __________section of ICA,1872.
Section-200
Section-205
Section-206
Section-207
Agent's duty in conducting principal's business is defined under __________section of ICA,1872.
Section-200
Section-211
Section-206
Section-207
Assertion (A): A principal can ratify an unauthorized act of his agent. Reason (R): Ratification is a retrospective approval of an unauthorized act.
If both A and R are true and R is the correct explanation of A.
If both A and R are true but R is NOT the correct explanation of A.
If A is true but R is false.
If A is false but R is true.
An agent is bound to render proper accounts to his ---------- on demand.
Agent
Principal
Sub agent
Third parties
Agent not entitled to remuneration for business misconducted is defined under __________section of ICA,1872.
Section-221
Section-220
Section-222
Section-200
Agent to be indemnified against consequences of lawful acts is defined under __________section of ICA,1872.
Section-221
Section-220
Section-222
Section-200
Where one person employs another to do an act, and the agent does the act in good faith, the employer is liable to indemnify the agent against the consequences of that act, though it cause an injury to the rights of third persons defined under -------- section of ICA,1872.
Section-221
Section-223
Section-222
Section-200
---------must make compensation to his agent in respect of injury caused to such agent by the principal's neglect or want of skill.
Principal
Agent
Sub agent
None of the above
The person who involves in buying, selling and pledging to raise money in the ordinary course of business is --------
Mercantile agent
Non mercantile agent
Substituted agent
Sub agent
The authority of the universal agent is-------
Limited
Unlimited
Both A & B
None of the above
Assertion (A): An agent can bind his principal even without express authority. Reason (R): Implied authority arises from the nature of the agency or the course of dealing between the principal and the agent.
If both A and R are true and R is the correct explanation of A.
If both A and R are true but R is NOT the correct explanation of A.
If A is true but R is false.
If A is false but R is true.
Any person who is of the age of --------according to the law to which he is subject, and who is of -------, may employ an agent.
Majority & sound mind
Majority and unsound mind
Lunatic and major
During lucid interval and major
What is the definition of "bailment" under Section 148?
Transfer of property from one person to another
Delivery of goods for some purpose under a contract, to be returned when accomplished
Sale of goods between two parties
Temporary ownership of goods
Who is called the "bailee" in a contract of bailment?
The person who receives the goods for a particular purpose
The person who owns the goods
The third-party intermediary
The party who sells the goods
Which section defines the duties of the bailor to disclose faults in goods bailed?
Section 148
Section 149
Section 150
Section 151
What is the bailor's responsibility in relation to the faults in goods bailed?
To ensure the goods are insured
To disclose any faults that materially interfere with the use of the goods
To repair any faults before delivering the goods
To compensate the bailee for any damages
Under Section 151, how much care must a bailee take of the goods bailed to them?
As much care as an ordinary person would take of their own goods
As much care as a person would take of the goods of another person
As much care as required by the bailor
No care is required unless specified
If the bailee uses the goods for a purpose other than specified in the contract, what is the consequence?
The contract is terminated automatically
The bailee is liable for any damage caused during such unauthorized use
The goods must be returned immediately
The bailor must compensate the bailee for damages
Under Section 155, what happens when the goods are mixed without the bailor's consent, and the goods can be separated?
The property in the goods passes to the bailee
The goods remain in the ownership of the bailee
The goods must be separated at the expense of the bailee
The bailor becomes liable for damages
Under Section 159, when can the lender of a gratuitous bailment demand the return of the goods?
Only after the specified time or purpose has expired
At any time, even before the agreed time
If the borrower has used the goods recklessly
After informing the bailee 15 days in advance
If a gratuitous bailment ends due to the death of the bailor, what happens to the contract?
The contract continues if agreed upon in advance
The bailment is automatically terminated
The bailee must return the goods to the bailor's family
The bailee can claim ownership of the goods
When several joint owners bail goods, who can the bailee return the goods to?
Any one joint owner without the consent of others
All joint owners must be consulted
Only the owner who bailed the goods
The bailee must wait for written consent from all joint owners
If a bailee returns goods without verifying the bailor's title, what is the result?
The bailee is liable to the original owner for the loss
The bailee is not responsible as they acted in good faith
The bailee loses their right to compensation
The goods are forfeited to the state
If a bailee is given a reward for returning goods, what can the finder of goods claim under Section 168?
They can sue for any compensation spent preserving the goods
They can sell the goods and keep the proceeds
They can claim the reward offered by the owner for returning the goods
They are not entitled to any reward
What is the general lien of a banker, factor, or attorney in relation to goods bailed under Section 171?
They have no lien on the goods
They can retain goods bailed to them until payment for any balance due
They must return the goods immediately after a contract is completed
They can sell the goods to recover any outstanding amounts
What is the consequence of mixing the bailor's goods with the bailee's own goods without consent?
The goods are automatically returned to the bailor
The bailee is responsible for any expense or damage caused by the mixture
The bailee becomes the owner of the goods
The goods cannot be separated
Which section defines the term "bailment" and the roles of the bailor and bailee?
Section 148
Section 150
Section 151
Section 160
Which section allows the bailor to terminate the bailment if the bailee acts inconsistently with the terms of the contract?
Section 153
Section 154
Section 155
Section 159
Which section specifies that the bailor is entitled to any increase or profit arising from the goods bailed?
Section 163
Section 164
Section 165
Section 166
Section 161 deals with:
The return of goods after a contract of bailment ends
The responsibility of the bailee to return goods on time
The compensation for injury caused by the bailee
The expense of preserving pledged goods
Which of the following best describes the "general lien" under Section 171?
A right of the bailee to retain goods for any balance due, even without a contract
A right to retain goods only if there is a specific agreement for each item
A right to retain goods if the owner fails to pay for services rendered
A right of bankers, factors, wharfingers, attorneys, and policy brokers to retain goods for a general balance of account
Which of the following is an example of a bailee exercising a particular lien under Section 170?
A jeweller retains a diamond for polishing until paid
A tailor retains a coat until paid for the cloth
A tailor delivers a coat on credit without retaining it
A bank retains a customer's documents for safe-keeping
What is the definition of a "pledge" under Section 172?
A sale of goods as security for payment
A loan made with the promise of repayment
The bailment of goods as security for payment of a debt or performance of a promise
A transfer of goods for a fixed period
Which section deals with the pawnee's right to retain the pledged goods until the debt is paid?
Section 172
Section 173
Section 175
Section 176
Which section of the Sale of Goods Act addresses the pawnee's entitlement to claim extraordinary expenses incurred for the preservation of pledged goods?
Section 175
Section 176
Section 177
Section 179
What happens when the pawnor defaults on the payment of a debt or performance of a promise under Section 176?
The pawnee can return the goods without any penalty
The pawnee can sue the pawnor or sell the pledged goods after giving reasonable notice
The pawnor automatically forfeits the pledged goods
The pawnee is required to return the goods to the pawnor
Section 177 allows the pawnor to redeem pledged goods:
At any time before the actual sale, by paying the debt and any expenses incurred
Only after the sale of the goods
After the expiration of the time specified in the agreement
Only with the pawnee's permission
What is the effect of a pledge made by a mercantile agent with the consent of the owner under Section 178?
The pledge is invalid unless the pawnor's consent is obtained
The pledge is valid as if the agent were expressly authorized by the owner
The pawnee must seek the owner's permission to sell the goods
The pledge is void if the agent is not authorized in writing
Which section of the Indian Contract Act, 1872 deals with a pledge where the pawnor has only a limited interest in the goods?
Section 179
Section 180
Section 181
Section 172
What action can a bailee take under Section 180 if a third person wrongfully deprives the bailee of the goods?
The bailee can seek a remedy from the third person for deprivation or injury
The bailee must report the incident to the pawnor
The bailee must return the goods to the pawnor
The bailee cannot take any action without the pawnor's permission
Under Section 161, what happens if the bailee fails to return the goods on time?
The bailee is not liable for damages
The bailee is responsible for any deterioration of the goods
The bailor can terminate the contract without any liabilities
The bailee loses their right to compensation
Under Section 164, who is responsible if the bailor is not entitled to make the bailment?
The bailee is responsible for the loss
The bailor is responsible for the loss
Both the bailee and bailor share the responsibility
The goods are forfeited
What is the primary difference between a 'bailment' and a 'pledge'?
Bailment involves the transfer of ownership, while a pledge involves goods used as security for debt
A bailment does not require the goods to be returned, while a pledge always requires the return of goods
A pledge is a type of bailment, but with the goods being used as security for a debt or promise
There is no difference between bailment and pledge
Which of the following distinguishes 'sale' from 'bailment'?
In a sale, ownership of the goods is transferred, while in bailment, ownership is not transferred
In bailment, the goods are sold for a fixed price, while in sale, goods are rented
Bailment involves goods used for a specific purpose only, whereas sale is for general purposes
Sale involves the delivery of goods as security for debt, while bailment does not
What is the key difference between a pledge and a mortgage?
A pledge involves the transfer of ownership, while a mortgage only involves a transfer of possession
A pledge requires the borrower to give possession of the goods to the lender, while in a mortgage, the borrower retains possession of the property
A pledge is only applicable to real property, while a mortgage applies to personal property
A pledge does not involve any security for the loan, while a mortgage does
What is the main difference between a sale and a hire purchase agreement?
In a sale, ownership is transferred immediately, while in a hire purchase, ownership is transferred after all instalments are paid
A hire purchase involves a fixed price, while a sale does not involve any price
In a sale, the goods are rented, while in a hire purchase, the goods are bought outright
A sale agreement always involves the delivery of goods, while a hire purchase does not require delivery
How does a pledge differ from hypothecation?
In a pledge, the goods are kept in the possession of the borrower, while in hypothecation, the goods are kept in the possession of the lender
In hypothecation, the borrower retains possession of the goods, while in a pledge, the goods are transferred to the lender as security
A pledge is always related to real property, while hypothecation applies to personal property
There is no difference between a pledge and hypothecation
A contract of indemnity is defined under which section of the Indian Contract Act, 1872?
Section 124
Section 125
Section 126
Section 127
The contract of indemnity involves how many parties?
One
Two
Three
Four
In a contract of indemnity, who is the person giving the indemnity?
Indemnifier
Indemnity-holder
Third party
Beneficiary
The promisee in a contract of indemnity is known as the:
Indemnifier
Indemnity-holder
Principal debtor
Surety
Which of the following is an essential element of a contract of indemnity?
A promise to save from loss
Loss caused by the promisor's conduct
Loss caused by the conduct of any other person
All of the above
When does the indemnifier's liability arise?
When the indemnity-holder suffers loss
When the contract is formed
When the third party makes a claim
When the promisor defaults
Indemnity contracts can cover:
Loss caused by human agency
Loss caused by an accident
Both A and B
Neither A nor B
The indemnifier is liable to pay for:
Damages the indemnity-holder may be compelled to pay
Costs incurred by the indemnity-holder in defending a suit
All damages, costs, and legal fees
Only direct losses
A contract of indemnity is:
A contingent contract
A wagering contract
A voidable contract
A void agreement
The indemnity-holder can recover:
All sums he is compelled to pay in any suit
All costs which he may be compelled to pay in any such suit
Both A and B
Only nominal damages
A contract of guarantee is defined under which section of the Indian Contract Act, 1872?
Section 124
Section 125
Section 126
Section 127
How many parties are involved in a contract of guarantee?
Two
Three
Four
Five
Who is the person to whom the guarantee is given?
Principal debtor
Surety
Creditor
Indemnifier
In a contract of guarantee, the person who gives the guarantee is called the:
Principal debtor
Creditor
Surety
Indemnifier
The person whose debt is guaranteed is called the:
Principal debtor
Creditor
Surety
Indemnifier
A contract of guarantee may be:
Only written
Only oral
Either oral or written
Only implied
Which of the following is NOT an essential feature of a contract of guarantee?
Three parties
Principal debt
A past consideration
Concurrence of all parties
A continuing guarantee is defined in which section of the Indian Contract Act, 1872?
Section 126
Section 127
Section 128
Section 129
In a contract of guarantee, the surety's liability is:
Primary liability
Co-extensive with that of the principal debtor
Limited to the amount guaranteed
Independent of the principal debtor's liability
The liability of a surety is discharged if:
The creditor releases the principal debtor
The principal debtor becomes insolvent
The creditor fails to sue the principal debtor
The surety gives notice of revocation
Which of the following would discharge a surety from his obligations?
Variance in the terms of the contract without the surety's consent
Granting of time to the principal debtor by the creditor
Release of the principal debtor by the creditor
All of the above
A surety is entitled to:
Subrogation rights after paying the debt
Indemnity from the creditor
Release from liability if the principal debtor defaults
All the above
Which of the following contracts is void?
A guarantee obtained by misrepresentation
A guarantee for a minor's debt
A guarantee without consideration
A guarantee for future advances
For a guarantee contract to be valid, there must be:
An existing debt or obligation
A new consideration for the surety
Written consent from the principal debtor
All of the above
A guarantee that covers multiple transactions is called a:
Specific guarantee
Continuing guarantee
Conditional guarantee
Implied guarantee
In the case of a contract of guarantee, the surety can claim:
Contribution from other co-sureties
Indemnity from the creditor
Damages from the principal debtor
Subrogation rights from the principal debtor only
Which of the following is true regarding the surety's liability in a contract of guarantee?
The surety's liability is contingent on the default of the principal debtor
The surety's liability is primary and independent
The surety is liable only if the principal debtor is solvent
The surety's liability is limited to the amount of actual loss
A surety's liability in a guarantee is:
Primary and absolute
Conditional upon the debtor's default
Limited to the principal amount only
Always discharged upon the death of the debtor
A specific guarantee is discharged:
When the guaranteed debt is paid
After a specified period
Upon the death of the surety
When the creditor gives notice
In a continuing guarantee, the surety is liable for:
A single transaction only
A series of transactions
Transactions only if they are in writing
Only past transactions
The principal debtor is:
The party who owes the debt
The party who gives the guarantee
The party to whom the guarantee is given
The party who initiates the contract
