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Judiciary Exams Exam  >  Judiciary Exams Tests  >  Civil Law for Judiciary Exams  >  Test: Definition of Pledge under the Indian Contract Act - Judiciary Exams MCQ

Test: Definition of Pledge under the Indian Contract Act - Judiciary Exams MCQ


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15 Questions MCQ Test Civil Law for Judiciary Exams - Test: Definition of Pledge under the Indian Contract Act

Test: Definition of Pledge under the Indian Contract Act for Judiciary Exams 2024 is part of Civil Law for Judiciary Exams preparation. The Test: Definition of Pledge under the Indian Contract Act questions and answers have been prepared according to the Judiciary Exams exam syllabus.The Test: Definition of Pledge under the Indian Contract Act MCQs are made for Judiciary Exams 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Definition of Pledge under the Indian Contract Act below.
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Test: Definition of Pledge under the Indian Contract Act - Question 1
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What is the primary purpose of a Contract of Pledge?

Detailed Solution for Test: Definition of Pledge under the Indian Contract Act - Question 1
The primary purpose of a Contract of Pledge is to provide security for the repayment of a debt or the performance of a promise. In this type of contract, goods are delivered by the pawnor to the pawnee as collateral for the debt owed. It differs from a contract of bailment in that the goods are specifically handed over as security, highlighting the importance of the debtor fulfilling their obligation to the creditor.
Test: Definition of Pledge under the Indian Contract Act - Question 2
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What distinguishes a Contract of Pledge from a Contract of Bailment?

Detailed Solution for Test: Definition of Pledge under the Indian Contract Act - Question 2
A key distinction between a Contract of Pledge and a Contract of Bailment is the specific purpose of delivering goods as security in a pledge. While both involve the delivery of goods, in a pledge, the goods are handed over as collateral for a debt owed, with the pawnee holding them as security. This differs from a bailment, where goods are typically delivered for a specific purpose but not necessarily as security for a debt.
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Test: Definition of Pledge under the Indian Contract Act - Question 3
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Which party in a pledge arrangement holds the goods as security for a debt owed?

Detailed Solution for Test: Definition of Pledge under the Indian Contract Act - Question 3
In a pledge arrangement, the party that holds the goods as security for a debt owed is the pawnee. The pawnee receives the goods from the pawnor as collateral, providing assurance that the debt will be repaid. This arrangement ensures that the pawnee has a form of security in case the debtor fails to fulfill their obligation.
Test: Definition of Pledge under the Indian Contract Act - Question 4
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What is a right that the pawnee possesses in a contract of pledge according to Section 173 of the Indian Contract Act?
Detailed Solution for Test: Definition of Pledge under the Indian Contract Act - Question 4
In a contract of pledge, the pawnee has the right to retain goods until payment is received as per Section 173 of the Indian Contract Act. This right allows the pawnee to hold onto the pledged goods until the debt or obligation is discharged by the pawnor. It serves as a form of security for the pawnee until the terms of the pledge are fulfilled.
Test: Definition of Pledge under the Indian Contract Act - Question 5
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What duty does the pawnee have in relation to the pledged goods as outlined in the Indian Contract Act?
Detailed Solution for Test: Definition of Pledge under the Indian Contract Act - Question 5
According to the Indian Contract Act, the pawnee has a duty to return the pledged goods upon payment of the debt or performance of the promise made by the pawnor. This duty ensures that once the obligation is fulfilled, the pawnee is obligated to return the goods promptly. It underscores the importance of honoring the terms of the contract of pledge.
Test: Definition of Pledge under the Indian Contract Act - Question 6
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Which section of the Indian Contract Act allows the pawnee to retain goods until subsequent advances are paid?
Detailed Solution for Test: Definition of Pledge under the Indian Contract Act - Question 6
Section 174 of the Indian Contract Act enables the pawnee to retain goods until subsequent advances are paid. This provision grants the pawnee the right to hold onto the pledged goods until any additional advances or sums owed are settled. It serves as a safeguard for the pawnee in cases where multiple transactions or advances are involved in the contract of pledge.
Test: Definition of Pledge under the Indian Contract Act - Question 7
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What right does Section 177 grant to a defaulting pawnor concerning the pledged goods?
Detailed Solution for Test: Definition of Pledge under the Indian Contract Act - Question 7
Section 177 grants a defaulting pawnor the right to redeem the pledged goods before their sale by paying the debt along with any additional expenses incurred due to default. This provision ensures that the pawnor has the opportunity to recover the pledged items by settling the outstanding debt and related costs.
Test: Definition of Pledge under the Indian Contract Act - Question 8
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In the context of a pawnor's demise, who holds the right to redeem the pledged goods according to the legal framework?
Detailed Solution for Test: Definition of Pledge under the Indian Contract Act - Question 8
In case of the pawnor's demise, the legal heir is entitled to redeem the goods on behalf of the deceased pawnor. This right ensures that even in the event of the pawnor's death, their legal successor has the opportunity to reclaim the pledged items by following the established procedures.
Test: Definition of Pledge under the Indian Contract Act - Question 9
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What happens to the pledged goods if a defaulting pawnor fails to exercise their right to redeem them?
Detailed Solution for Test: Definition of Pledge under the Indian Contract Act - Question 9
If a defaulting pawnor does not exercise their right to redeem the pledged goods within the specified period, the goods can be sold by the pawnbroker to recover the debt owed. This action is typically taken to ensure that the pawnbroker can recover the funds associated with the pawn transaction in the absence of redemption by the pawnor.
Test: Definition of Pledge under the Indian Contract Act - Question 10
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What is one of the key responsibilities of a pawnor when entering into a pawn agreement?
Detailed Solution for Test: Definition of Pledge under the Indian Contract Act - Question 10
When a pawnor enters into a pawn agreement, one of their primary responsibilities is to repay the debt or fulfill the specified promise agreed upon. This means that the pawnor is obligated to return the borrowed amount or fulfill the terms of the agreement to reclaim the pledged goods. This responsibility ensures that the pawnee (the party lending the money) can rely on the pawnor to adhere to the agreement terms. It is essential for maintaining trust and ensuring a smooth transaction between the parties involved in the pawn agreement.
Test: Definition of Pledge under the Indian Contract Act - Question 11
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What action must the pawnor take regarding any defaults that could pose exceptional risks to the pawnee?
Detailed Solution for Test: Definition of Pledge under the Indian Contract Act - Question 11
In a pawn agreement, it is crucial for the pawnor to openly communicate any defaults that could expose the pawnee to exceptional risks. By doing so, the pawnor ensures transparency and allows the pawnee to assess the situation accurately. Open communication about potential risks or defaults helps in managing expectations and addressing issues promptly, fostering a more trustworthy relationship between the parties involved.
Test: Definition of Pledge under the Indian Contract Act - Question 12
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What is the pawnor's obligation if the pawnee suffers a loss due to a flaw in the pawnor's ownership title of the goods?
Detailed Solution for Test: Definition of Pledge under the Indian Contract Act - Question 12
If the pawnee experiences a loss as a result of a flaw in the pawnor's ownership title of the goods, the pawnor is obligated to compensate the pawnee. This obligation arises from the responsibility of the pawnor to provide accurate information and ensure that the pledged goods are rightfully owned. By compensating the pawnee for such losses, the pawnor upholds their commitment to the agreement and helps mitigate any financial setbacks faced by the pawnee due to ownership discrepancies.
Test: Definition of Pledge under the Indian Contract Act - Question 13
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What does a pledge by a mercantile agent entail according to Section 178 of the Indian Contract Act?
Detailed Solution for Test: Definition of Pledge under the Indian Contract Act - Question 13
A pledge by a mercantile agent, in accordance with Section 178 of the Indian Contract Act, involves the possession of goods or their title documents with the owner's consent. This legal framework ensures that any pledge made by the agent in the regular course of business is binding, provided the pawnee acts in good faith. Understanding the nuances of this provision is essential for upholding the validity and legality of pledges made by mercantile agents.
Test: Definition of Pledge under the Indian Contract Act - Question 14
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What is the significance of the consent of the owner in the context of a pledge by a mercantile agent?
Detailed Solution for Test: Definition of Pledge under the Indian Contract Act - Question 14
The consent of the owner plays a crucial role in validating a pledge made by a mercantile agent. When the owner consents to the agent pledging goods, it establishes the legality and enforceability of the pledge. This acknowledgment of consent is essential to ensure that all parties involved are aware of and agree to the terms of the transaction, thereby upholding the integrity of the pledge agreement.
Test: Definition of Pledge under the Indian Contract Act - Question 15
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What activities is a mercantile agent authorized to undertake concerning goods held as security on behalf of the owner?
Detailed Solution for Test: Definition of Pledge under the Indian Contract Act - Question 15
A mercantile agent is authorized to sell, consign, or obtain funds using goods held as security on behalf of the owner. This authorization grants the agent the ability to conduct business transactions related to the pledged goods in a manner that benefits the owner's interests. By understanding the scope of activities permitted to a mercantile agent, one can appreciate the responsibilities and rights associated with such roles in commercial contexts.
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