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The questions are to be answered on the basis of what is stated or implied in the passage.Choose the most appropriate response that accurately and completely answer the question.
A contract of guarantee is a contract to perform the promise, of discharge the liability,of a third person in case of his default. Anything done,or any promise made,for the benefit of the principal debtor may be a sufficient consideration to the surety for giving the guarantee.In every contract of guarantee there is an implied promise by the principal debtor to indemnify the surety, and the surety is entitled to recover from the principal debtor whatever sum he has rightfully paid under the guarantee,but no sums, which he has paid wrongfully. 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.Any guarantee,which the creditor has obtained by means of keeping silence as to material circumstance, is also invalid.
A contract of guarantee is a contract to perform the promise, of discharge the liability,of a third person in case of his default. Anything done,or any promise made,for the benefit of the principal debtor may be a sufficient consideration to the surety for giving the guarantee.In every contract of guarantee there is an implied promise by the principal debtor to indemnify the surety, and the surety is entitled to recover from the principal debtor whatever sum he has rightfully paid under the guarantee,but no sums, which he has paid wrongfully. 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.Any guarantee,which the creditor has obtained by means of keeping silence as to material circumstance, is also invalid.
Question: 1
Jack agreed to deliver goods on credit to Jill upon the promise of Jim to pay the price of goods. Jim gave a promise to guarantee the payment in consideration of Jack’s promise to deliver the goods. Later on Jill was unable to make the payment to Jack. Jim requested Jack to forbear to sue Jill for a Year and promised that Jim will pay for the debt of Jill. Jack accepted the request of Jim. Identify the wrong statement:
Jack agreed to deliver goods on credit to Jill upon the promise of Jim to pay the price of goods. Jim gave a promise to guarantee the payment in consideration of Jack’s promise to deliver the goods. Later on Jill was unable to make the payment to Jack. Jim requested Jack to forbear to sue Jill for a Year and promised that Jim will pay for the debt of Jill. Jack accepted the request of Jim. Identify the wrong statement:
Updated On: Aug 4, 2024
- Jack’s promise to deliver the goods is a sufficient consideration for Jim’s promise to guarantee the payment.
- Jack’s acceptance to forbear to sue Jill for a year is a sufficient consideration to Jim’s promise.
- Jim paying for Jill in the absence of any promise or acceptance by Jack is valid.
- None of the above.
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The Correct Option is C
Solution and Explanation
The correct option is (C): Jim paying for Jill in the absence of any promise or acceptance by Jack is valid.
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Question: 2
Jill is indebted to Jack and Jim is the surety for the debt. Jack demanded the debt from Jim and he refused to pay the same. On Jim’s refusal Jack sued him. Jim had reasonable grounds to defend the suit but was compelled to pay the amount of the debts with costs. Identify the right option for Jim.
Jill is indebted to Jack and Jim is the surety for the debt. Jack demanded the debt from Jim and he refused to pay the same. On Jim’s refusal Jack sued him. Jim had reasonable grounds to defend the suit but was compelled to pay the amount of the debts with costs. Identify the right option for Jim.
Updated On: Aug 4, 2024
- Jim can recover from Jill the principal debts as well as costs
- Jim can recover from Jill only the principal debt
- Jim cannot recover from Jill
- Jim can recover the costs but not the principal debts
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The Correct Option is A
Solution and Explanation
The correct option is (A): Jim can recover from Jill the principal debts as well as costs.
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Question: 3
Jack lends Jill a sum of money,and Jim,at the request of Jill accepts a bill of exchange drawn by Jill upon Jim to secure the amount. Jack,the holder of the bill,demands payment of it from Jim and on Jim’s refusal to pay,sues him upon the bill.Jim not having reasonable grounds for so doing, defends the suit, and has to pay the amount of the bill and costs.Identify the right option for Jim.
Jack lends Jill a sum of money,and Jim,at the request of Jill accepts a bill of exchange drawn by Jill upon Jim to secure the amount. Jack,the holder of the bill,demands payment of it from Jim and on Jim’s refusal to pay,sues him upon the bill.Jim not having reasonable grounds for so doing, defends the suit, and has to pay the amount of the bill and costs.Identify the right option for Jim.
Updated On: Aug 4, 2024
- Jim can recover from Jill the amount of the bill as well as costs
- Jim can recover from Jill only the amount of the bill
- Jim cannot recover from Jill
- Jim can recover the costs but not the amount of the bill
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The Correct Option is B
Solution and Explanation
The correct option is (B): Jim can recover from Jill only the amount of the bill.
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Question: 4
Jim guarantees to Jack,to the extent of Rs. 5000,payment for goods to be supplied by Jack to Jill.Jack supplies to Jill goods less than Rs. 5000,but obtains from Jim payment of the sum of Rs. 5000 in respect of the goods supplied.Identify the correct statement:
Jim guarantees to Jack,to the extent of Rs. 5000,payment for goods to be supplied by Jack to Jill.Jack supplies to Jill goods less than Rs. 5000,but obtains from Jim payment of the sum of Rs. 5000 in respect of the goods supplied.Identify the correct statement:
Updated On: Aug 4, 2024
- Jim can recover from Jill Rs. 5000/-
- Jim cannot recover anything from Jill
- Jim cannot recover from Jill more than the price of the goods actually supplied
- Jim can recover from Jill only after the completion of supply of goods worth Rs. 5000/-
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The Correct Option is C
Solution and Explanation
The correct option is (C): Jim cannot recover from Jill more than the price of the goods actually supplied.
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Question: 5
Jill owes money to Jack and Jim stood as surety for Jill. Jack’s claim became time barred against Jill but because of some payment by Jim it was in time against Jim. In a suit filed by Jack against Jim, Jim compromises by paying a lesser sum. Identify the correct statement:
Jill owes money to Jack and Jim stood as surety for Jill. Jack’s claim became time barred against Jill but because of some payment by Jim it was in time against Jim. In a suit filed by Jack against Jim, Jim compromises by paying a lesser sum. Identify the correct statement:
Updated On: Aug 4, 2024
- Jim can claim the full amount from Jill
- Jim can claim only the actual amount paid by him from Jill
- Jim cannot claim any amount from Jill
- Jim can claim the costs but not the amount paid in settlement
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The Correct Option is B
Solution and Explanation
The correct option is (B): Jim can claim only the actual amount paid by him from Jill
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