The question is based on the reasoning and arguments, or facts and principles set out in the passage. Some of these principles may not be true in the real or legal sense, yet you must conclusively assume that they are true for the purpose. Please answer the question on the basis of what is stated or implied in the passage. Do not rely on any principle of law other than the ones supplied to you, and do not assume any facts other than those supplied to you when answering the question. Please choose the option that most accurately and comprehensively answers the question.Sec. 126 of the Indian Contract Act, defines a contract of guarantee as andquot;A contract to perform the promise, or discharge the liability of a third person in case of his defaultsandquot;. A guarantee may be either andquot;oralandquot; or andquot;writtenandquot;. Just like any other contracts, it should also fulfill all the essentials of a valid contract. As stated already, three parties are involved in a contract of guarantee.All the three parties namely, the principal debtor, the creditor and the surety must agree to make such a contract. A contract of guarantee pre-supposes the existence of a liability, which is enforceable at law. If no such liability exists, there can be no contract of guarantee. Thus, where the debt, which is sought to be guaranteed, is already time barred or void, the surety is not liable. There must be consideration between the creditor and the surety so as to make the contract enforceable. The consideration must also be lawful. In a contract of guarantee, the consideration received by the principal debtor is taken to be the sufficient consideration for the surety. Thus, any benefit received by the debtor is adequate consideration to bind the surety. But past consideration is no consideration for a contract of guarantee. There must be a fresh consideration moving from the creditor. A contract of guarantee may either be oral or written. In a contract of guarantee, liability of the surety is secondary, i.e. the creditor must first proceed against the debtor and if the latter does not perform his promise, then only he can proceed against the surety. It may be express or implied from the conduct of parties. The creditor should disclose to the surety the facts that are likely to affect the suretys liability. The guarantee obtained by the concealment of such facts is invalid. Thus, the guarantee is invalid if the creditor obtains it by the concealment of material facts The guarantee should not be obtained by misrepresenting the facts to the surety. Though the contract of guarantee is not a contract of uberrimae fidei, i.e. of absolute good faith, and thus, does not require complete disclosure of all the material facts by the principal debtor or creditor to the surety before he enters into a contract. But the facts, that are likely to affect the extent of suretys responsibility, must be truly represented.Q.BHK Pvt Ltd. gave notice to Pooja, the debtor-defendant and also threatened legal action against her, but her husband agreed to become surety and undertook to pay the liability and also executed a promissory note in their favor. The Bank refrained from threatened action. Decide.a)This is valid as promissory note constituted good consideration for the surety.b)This is not valid as consideration has to be in monetary form.c)This is not valid as a promissory note doesnt constitute consideration.d)None of the aboveCorrect answer is option 'A'. Can you explain this answer?

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''The question is based on the reasoning and arguments, or facts and principles set out in the passage. Some of these principles may not be true in the real or legal sense, yet you must conclusively assume that they are true for the purpose. Please answer the question on the basis of what is stated or implied in the passage. Do not rely on any principle of law other than the ones supplied to you, and do not assume any facts other than those supplied to you when answering the question. Please choose the option that most accurately and comprehensively answers the question.''

Sec. 126 of the Indian Contract Act, defines a contract of guarantee as "A contract to perform the promise, or discharge the liability of a third person in case of his defaults". A guarantee may be either "oral" or "written". Just like any other contracts, it should also fulfill all the essentials of a valid contract. As stated already, three parties are involved in a contract of guarantee.
All the three parties namely, the principal debtor, the creditor and the surety must agree to make such a contract. A contract of guarantee pre-supposes the existence of a liability, which is enforceable at law. If no such liability exists, there can be no contract of guarantee. Thus, where the debt, which is sought to be guaranteed, is already time barred or void, the surety is not liable. There must be consideration between the creditor and the surety so as to make the contract enforceable. The consideration must also be lawful. In a contract of guarantee, the consideration received by the principal debtor is taken to be the sufficient consideration for the surety. Thus, any benefit received by the debtor is adequate consideration to bind the surety. But past consideration is no consideration for a contract of guarantee. There must be a fresh consideration moving from the creditor. A contract of guarantee may either be oral or written. In a contract of guarantee, liability of the surety is secondary, i.e. the creditor must first proceed against the debtor and if the latter does not perform his promise, then only he can proceed against the surety. It may be express or implied from the conduct of parties. The creditor should disclose to the surety the facts that are likely to affect the surety's liability. The guarantee obtained by the concealment of such facts is invalid. Thus, the guarantee is invalid if the creditor obtains it by the concealment of material facts The guarantee should not be obtained by misrepresenting the facts to the surety. Though the contract of guarantee is not a contract of uberrimae fidei, i.e. of absolute good faith, and thus, does not require complete disclosure of all the material facts by the principal debtor or creditor to the surety before he enters into a contract. But the facts, that are likely to affect the extent of surety's responsibility, must be truly represented.

Q. BHK Pvt Ltd. gave notice to Pooja, the debtor-defendant and also threatened legal action against her, but her husband agreed to become surety and undertook to pay the liability and also executed a promissory note in their favor. The Bank refrained from threatened action. Decide.

a)
This is valid as promissory note constituted good consideration for the surety.
b)
This is not valid as consideration has to be in monetary form.
c)
This is not valid as a promissory note doesn't constitute consideration.
d)
None of the above

Correct answer is option 'A'. Can you explain this answer?

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As stated above, there must be consideration between the creditor and the surety so as to make the contract enforceable. The consideration must also be lawful. In a contract of guarantee, the consideration received i.e the promissory note was a sufficient and an enforceable consideration.

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The question is based on the reasoning and arguments, or facts and principles set out in the passage. Some of these principles may not be true in the real or legal sense, yet you must conclusively assume that they are true for the purpose. Please answer the question on the basis of what is stated or implied in the passage. Do not rely on any principle of law other than the ones supplied to you, and do not assume any facts other than those supplied to you when answering the question. Please choose the option that most accurately and comprehensively answers the question.Sec. 126 of the Indian Contract Act, defines a contract of guarantee as "A contract to perform the promise, or discharge the liability of a third person in case of his defaults". A guarantee may be either "oral" or "written". Just like any other contracts, it should also fulfill all the essentials of a valid contract. As stated already, three parties are involved in a contract of guarantee.All the three parties namely, the principal debtor, the creditor and the surety must agree to make such a contract. A contract of guarantee pre-supposes the existence of a liability, which is enforceable at law. If no such liability exists, there can be no contract of guarantee. Thus, where the debt, which is sought to be guaranteed, is already time barred or void, the surety is not liable. There must be consideration between the creditor and the surety so as to make the contract enforceable. The consideration must also be lawful. In a contract of guarantee, the consideration received by the principal debtor is taken to be the sufficient consideration for the surety. Thus, any benefit received by the debtor is adequate consideration to bind the surety. But past consideration is no consideration for a contract of guarantee. There must be a fresh consideration moving from the creditor. A contract of guarantee may either be oral or written. In a contract of guarantee, liability of the surety is secondary, i.e. the creditor must first proceed against the debtor and if the latter does not perform his promise, then only he can proceed against the surety. It may be express or implied from the conduct of parties. The creditor should disclose to the surety the facts that are likely to affect the suretys liability. The guarantee obtained by the concealment of such facts is invalid. Thus, the guarantee is invalid if the creditor obtains it by the concealment of material facts The guarantee should not be obtained by misrepresenting the facts to the surety. Though the contract of guarantee is not a contract of uberrimae fidei, i.e. of absolute good faith, and thus, does not require complete disclosure of all the material facts by the principal debtor or creditor to the surety before he enters into a contract. But the facts, that are likely to affect the extent of suretys responsibility, must be truly represented.Q.Chetan lends money to Ashu. Chetan while signing the contract asks Ashu if she has a guarantor. Ashu without any intimation to Anuj gave his name as the guarantor. Ashu later on convinced Anuj to be the guarantor, but upon Ashus default, Anuj refused to pay. Decide.

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The question is based on the reasoning and arguments, or facts and principles set out in the passage. Some of these principles may not be true in the real or legal sense, yet you must conclusively assume that they are true for the purpose. Please answer the question on the basis of what is stated or implied in the passage. Do not rely on any principle of law other than the ones supplied to you, and do not assume any facts other than those supplied to you when answering the question. Please choose the option that most accurately and comprehensively answers the question.Sec. 126 of the Indian Contract Act, defines a contract of guarantee as "A contract to perform the promise, or discharge the liability of a third person in case of his defaults". A guarantee may be either "oral" or "written". Just like any other contracts, it should also fulfill all the essentials of a valid contract. As stated already, three parties are involved in a contract of guarantee.All the three parties namely, the principal debtor, the creditor and the surety must agree to make such a contract. A contract of guarantee pre-supposes the existence of a liability, which is enforceable at law. If no such liability exists, there can be no contract of guarantee. Thus, where the debt, which is sought to be guaranteed, is already time barred or void, the surety is not liable. There must be consideration between the creditor and the surety so as to make the contract enforceable. The consideration must also be lawful. In a contract of guarantee, the consideration received by the principal debtor is taken to be the sufficient consideration for the surety. Thus, any benefit received by the debtor is adequate consideration to bind the surety. But past consideration is no consideration for a contract of guarantee. There must be a fresh consideration moving from the creditor. A contract of guarantee may either be oral or written. In a contract of guarantee, liability of the surety is secondary, i.e. the creditor must first proceed against the debtor and if the latter does not perform his promise, then only he can proceed against the surety. It may be express or implied from the conduct of parties. The creditor should disclose to the surety the facts that are likely to affect the suretys liability. The guarantee obtained by the concealment of such facts is invalid. Thus, the guarantee is invalid if the creditor obtains it by the concealment of material facts The guarantee should not be obtained by misrepresenting the facts to the surety. Though the contract of guarantee is not a contract of uberrimae fidei, i.e. of absolute good faith, and thus, does not require complete disclosure of all the material facts by the principal debtor or creditor to the surety before he enters into a contract. But the facts, that are likely to affect the extent of suretys responsibility, must be truly represented.Q.Anjan supplies goods to Neel on Lavins guarantee that he will pay if Neel defaults and he provides guarantee orally. He agreed to sign a contract later on. Neel made a default on payment. Having not signed the contract of guarantee, Lavin wanted to wriggle out of the situation. He said he didnt stand as a guarantor. Decide.

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The question is based on the reasoning and arguments, or facts and principles set out in the passage. Some of these principles may not be true in the real or legal sense, yet you must conclusively assume that they are true for the purpose. Please answer the question on the basis of what is stated or implied in the passage. Do not rely on any principle of law other than the ones supplied to you, and do not assume any facts other than those supplied to you when answering the question. Please choose the option that most accurately and comprehensively answers the question.Sec. 126 of the Indian Contract Act, defines a contract of guarantee as "A contract to perform the promise, or discharge the liability of a third person in case of his defaults". A guarantee may be either "oral" or "written". Just like any other contracts, it should also fulfill all the essentials of a valid contract. As stated already, three parties are involved in a contract of guarantee.All the three parties namely, the principal debtor, the creditor and the surety must agree to make such a contract. A contract of guarantee pre-supposes the existence of a liability, which is enforceable at law. If no such liability exists, there can be no contract of guarantee. Thus, where the debt, which is sought to be guaranteed, is already time barred or void, the surety is not liable. There must be consideration between the creditor and the surety so as to make the contract enforceable. The consideration must also be lawful. In a contract of guarantee, the consideration received by the principal debtor is taken to be the sufficient consideration for the surety. Thus, any benefit received by the debtor is adequate consideration to bind the surety. But past consideration is no consideration for a contract of guarantee. There must be a fresh consideration moving from the creditor. A contract of guarantee may either be oral or written. In a contract of guarantee, liability of the surety is secondary, i.e. the creditor must first proceed against the debtor and if the latter does not perform his promise, then only he can proceed against the surety. It may be express or implied from the conduct of parties. The creditor should disclose to the surety the facts that are likely to affect the suretys liability. The guarantee obtained by the concealment of such facts is invalid. Thus, the guarantee is invalid if the creditor obtains it by the concealment of material facts The guarantee should not be obtained by misrepresenting the facts to the surety. Though the contract of guarantee is not a contract of uberrimae fidei, i.e. of absolute good faith, and thus, does not require complete disclosure of all the material facts by the principal debtor or creditor to the surety before he enters into a contract. But the facts, that are likely to affect the extent of suretys responsibility, must be truly represented.Q.Chetna advances loan of Rs 1 lakh to Chitra. Palak, boss of Chitra, promises that in case Chitra fails to repay the loan, she will repay the same. Chitra fails to repay the loan upon being declared bankrupt. Chetna filed a case against Palak for default. Decide.

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Passage:In the 1850s, around the time the Indian Contract Act was about to be drafted, consideration was on its way to becoming a ‘mere technicality’ and could very well have ‘withered away altogether’. It should not be surprising then that framers of a midnineteenth century contract code, beginning tabula rasa, might have wished to fundamentally shake up the rules relating to consideration. Indeed, as Ibbetson argues, ‘a codifying system might legitimately have discarded consideration as inconsistent with the newly imposed legal model’ – an option ‘not open to the Common law.’ But like the ingenious common law reformers in England, the drafters continued to pay ‘lip service’ to the idea of consideration and the ‘reciprocity’ underlying it. They did indeed retain the traditional doctrine’s outer crust of reciprocity: an act or abstinence or promise on the ‘other side’, as it were, but they tweaked this in important ways. The framers of the Act, like the English Courts of the day, made it very easy to find consideration by defining it in capacious terms, which included any act or abstinence or promise, regardless of benefit or detriment. Perhaps, they too, like the Law Revision Committee, were mindful of the fact that a root and branch abolition of the doctrine might arouse ‘suspicion and hostility’ and hence decided to ‘prune away from the doctrine those aspects of it that create hardship’. They also provided that no question of adequacy of consideration could ever be raised. However, the definition under the Indian Contract Act did more than that – Section 2( d) had other elements that lent it the makings of marking the vanishing point of consideration.The definition of consideration under the Indian Contract Act, with its copula ‘at the desire of’, appears to have been calculated to preempt potential hair splitting over whether the consideration in any given case was indeed valuable in the ‘eye of the law’. The idea at play here is that of the subjective theory of value: that the Courts would not second-guess whether any consideration was actually valuable – what the promisor desired is what he got and that settled conclusively the matter of the value of consideration. This was one of the effects of the influence of the will theory on the traditional exchange model of consideration.Q.Which of these is true?

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The question is based on the reasoning and arguments, or facts and principles set out in the passage. Some of these principles may not be true in the real or legal sense, yet you must conclusively assume that they are true for the purpose. Please answer the question on the basis of what is stated or implied in the passage. Do not rely on any principle of law other than the ones supplied to you, and do not assume any facts other than those supplied to you when answering the question. Please choose the option that most accurately and comprehensively answers the question.Sec. 126 of the Indian Contract Act, defines a contract of guarantee as "A contract to perform the promise, or discharge the liability of a third person in case of his defaults". A guarantee may be either "oral" or "written". Just like any other contracts, it should also fulfill all the essentials of a valid contract. As stated already, three parties are involved in a contract of guarantee.All the three parties namely, the principal debtor, the creditor and the surety must agree to make such a contract. A contract of guarantee pre-supposes the existence of a liability, which is enforceable at law. If no such liability exists, there can be no contract of guarantee. Thus, where the debt, which is sought to be guaranteed, is already time barred or void, the surety is not liable. There must be consideration between the creditor and the surety so as to make the contract enforceable. The consideration must also be lawful. In a contract of guarantee, the consideration received by the principal debtor is taken to be the sufficient consideration for the surety. Thus, any benefit received by the debtor is adequate consideration to bind the surety. But past consideration is no consideration for a contract of guarantee. There must be a fresh consideration moving from the creditor. A contract of guarantee may either be oral or written. In a contract of guarantee, liability of the surety is secondary, i.e. the creditor must first proceed against the debtor and if the latter does not perform his promise, then only he can proceed against the surety. It may be express or implied from the conduct of parties. The creditor should disclose to the surety the facts that are likely to affect the suretys liability. The guarantee obtained by the concealment of such facts is invalid. Thus, the guarantee is invalid if the creditor obtains it by the concealment of material facts The guarantee should not be obtained by misrepresenting the facts to the surety. Though the contract of guarantee is not a contract of uberrimae fidei, i.e. of absolute good faith, and thus, does not require complete disclosure of all the material facts by the principal debtor or creditor to the surety before he enters into a contract. But the facts, that are likely to affect the extent of suretys responsibility, must be truly represented.Q.BHK Pvt Ltd. gave notice to Pooja, the debtor-defendant and also threatened legal action against her, but her husband agreed to become surety and undertook to pay the liability and also executed a promissory note in their favor. The Bank refrained from threatened action. Decide.a)This is valid as promissory note constituted good consideration for the surety.b)This is not valid as consideration has to be in monetary form.c)This is not valid as a promissory note doesnt constitute consideration.d)None of the aboveCorrect answer is option 'A'. Can you explain this answer?

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The question is based on the reasoning and arguments, or facts and principles set out in the passage. Some of these principles may not be true in the real or legal sense, yet you must conclusively assume that they are true for the purpose. Please answer the question on the basis of what is stated or implied in the passage. Do not rely on any principle of law other than the ones supplied to you, and do not assume any facts other than those supplied to you when answering the question. Please choose the option that most accurately and comprehensively answers the question.Sec. 126 of the Indian Contract Act, defines a contract of guarantee as "A contract to perform the promise, or discharge the liability of a third person in case of his defaults". A guarantee may be either "oral" or "written". Just like any other contracts, it should also fulfill all the essentials of a valid contract. As stated already, three parties are involved in a contract of guarantee.All the three parties namely, the principal debtor, the creditor and the surety must agree to make such a contract. A contract of guarantee pre-supposes the existence of a liability, which is enforceable at law. If no such liability exists, there can be no contract of guarantee. Thus, where the debt, which is sought to be guaranteed, is already time barred or void, the surety is not liable. There must be consideration between the creditor and the surety so as to make the contract enforceable. The consideration must also be lawful. In a contract of guarantee, the consideration received by the principal debtor is taken to be the sufficient consideration for the surety. Thus, any benefit received by the debtor is adequate consideration to bind the surety. But past consideration is no consideration for a contract of guarantee. There must be a fresh consideration moving from the creditor. A contract of guarantee may either be oral or written. In a contract of guarantee, liability of the surety is secondary, i.e. the creditor must first proceed against the debtor and if the latter does not perform his promise, then only he can proceed against the surety. It may be express or implied from the conduct of parties. The creditor should disclose to the surety the facts that are likely to affect the suretys liability. The guarantee obtained by the concealment of such facts is invalid. Thus, the guarantee is invalid if the creditor obtains it by the concealment of material facts The guarantee should not be obtained by misrepresenting the facts to the surety. Though the contract of guarantee is not a contract of uberrimae fidei, i.e. of absolute good faith, and thus, does not require complete disclosure of all the material facts by the principal debtor or creditor to the surety before he enters into a contract. But the facts, that are likely to affect the extent of suretys responsibility, must be truly represented.Q.BHK Pvt Ltd. gave notice to Pooja, the debtor-defendant and also threatened legal action against her, but her husband agreed to become surety and undertook to pay the liability and also executed a promissory note in their favor. The Bank refrained from threatened action. Decide.a)This is valid as promissory note constituted good consideration for the surety.b)This is not valid as consideration has to be in monetary form.c)This is not valid as a promissory note doesnt constitute consideration.d)None of the aboveCorrect answer is option 'A'. Can you explain this answer? for CLAT 2024 is part of CLAT preparation. The Question and answers have been prepared according to the CLAT exam syllabus. Information about The question is based on the reasoning and arguments, or facts and principles set out in the passage. Some of these principles may not be true in the real or legal sense, yet you must conclusively assume that they are true for the purpose. Please answer the question on the basis of what is stated or implied in the passage. Do not rely on any principle of law other than the ones supplied to you, and do not assume any facts other than those supplied to you when answering the question. Please choose the option that most accurately and comprehensively answers the question.Sec. 126 of the Indian Contract Act, defines a contract of guarantee as "A contract to perform the promise, or discharge the liability of a third person in case of his defaults". A guarantee may be either "oral" or "written". Just like any other contracts, it should also fulfill all the essentials of a valid contract. As stated already, three parties are involved in a contract of guarantee.All the three parties namely, the principal debtor, the creditor and the surety must agree to make such a contract. A contract of guarantee pre-supposes the existence of a liability, which is enforceable at law. If no such liability exists, there can be no contract of guarantee. Thus, where the debt, which is sought to be guaranteed, is already time barred or void, the surety is not liable. There must be consideration between the creditor and the surety so as to make the contract enforceable. The consideration must also be lawful. In a contract of guarantee, the consideration received by the principal debtor is taken to be the sufficient consideration for the surety. Thus, any benefit received by the debtor is adequate consideration to bind the surety. But past consideration is no consideration for a contract of guarantee. There must be a fresh consideration moving from the creditor. A contract of guarantee may either be oral or written. In a contract of guarantee, liability of the surety is secondary, i.e. the creditor must first proceed against the debtor and if the latter does not perform his promise, then only he can proceed against the surety. It may be express or implied from the conduct of parties. The creditor should disclose to the surety the facts that are likely to affect the suretys liability. The guarantee obtained by the concealment of such facts is invalid. Thus, the guarantee is invalid if the creditor obtains it by the concealment of material facts The guarantee should not be obtained by misrepresenting the facts to the surety. Though the contract of guarantee is not a contract of uberrimae fidei, i.e. of absolute good faith, and thus, does not require complete disclosure of all the material facts by the principal debtor or creditor to the surety before he enters into a contract. But the facts, that are likely to affect the extent of suretys responsibility, must be truly represented.Q.BHK Pvt Ltd. gave notice to Pooja, the debtor-defendant and also threatened legal action against her, but her husband agreed to become surety and undertook to pay the liability and also executed a promissory note in their favor. The Bank refrained from threatened action. Decide.a)This is valid as promissory note constituted good consideration for the surety.b)This is not valid as consideration has to be in monetary form.c)This is not valid as a promissory note doesnt constitute consideration.d)None of the aboveCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CLAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The question is based on the reasoning and arguments, or facts and principles set out in the passage. Some of these principles may not be true in the real or legal sense, yet you must conclusively assume that they are true for the purpose. Please answer the question on the basis of what is stated or implied in the passage. Do not rely on any principle of law other than the ones supplied to you, and do not assume any facts other than those supplied to you when answering the question. Please choose the option that most accurately and comprehensively answers the question.Sec. 126 of the Indian Contract Act, defines a contract of guarantee as "A contract to perform the promise, or discharge the liability of a third person in case of his defaults". A guarantee may be either "oral" or "written". Just like any other contracts, it should also fulfill all the essentials of a valid contract. As stated already, three parties are involved in a contract of guarantee.All the three parties namely, the principal debtor, the creditor and the surety must agree to make such a contract. A contract of guarantee pre-supposes the existence of a liability, which is enforceable at law. If no such liability exists, there can be no contract of guarantee. Thus, where the debt, which is sought to be guaranteed, is already time barred or void, the surety is not liable. There must be consideration between the creditor and the surety so as to make the contract enforceable. The consideration must also be lawful. In a contract of guarantee, the consideration received by the principal debtor is taken to be the sufficient consideration for the surety. Thus, any benefit received by the debtor is adequate consideration to bind the surety. But past consideration is no consideration for a contract of guarantee. There must be a fresh consideration moving from the creditor. A contract of guarantee may either be oral or written. In a contract of guarantee, liability of the surety is secondary, i.e. the creditor must first proceed against the debtor and if the latter does not perform his promise, then only he can proceed against the surety. It may be express or implied from the conduct of parties. The creditor should disclose to the surety the facts that are likely to affect the suretys liability. The guarantee obtained by the concealment of such facts is invalid. Thus, the guarantee is invalid if the creditor obtains it by the concealment of material facts The guarantee should not be obtained by misrepresenting the facts to the surety. Though the contract of guarantee is not a contract of uberrimae fidei, i.e. of absolute good faith, and thus, does not require complete disclosure of all the material facts by the principal debtor or creditor to the surety before he enters into a contract. But the facts, that are likely to affect the extent of suretys responsibility, must be truly represented.Q.BHK Pvt Ltd. gave notice to Pooja, the debtor-defendant and also threatened legal action against her, but her husband agreed to become surety and undertook to pay the liability and also executed a promissory note in their favor. The Bank refrained from threatened action. Decide.a)This is valid as promissory note constituted good consideration for the surety.b)This is not valid as consideration has to be in monetary form.c)This is not valid as a promissory note doesnt constitute consideration.d)None of the aboveCorrect answer is option 'A'. Can you explain this answer?.

Solutions for The question is based on the reasoning and arguments, or facts and principles set out in the passage. Some of these principles may not be true in the real or legal sense, yet you must conclusively assume that they are true for the purpose. Please answer the question on the basis of what is stated or implied in the passage. Do not rely on any principle of law other than the ones supplied to you, and do not assume any facts other than those supplied to you when answering the question. Please choose the option that most accurately and comprehensively answers the question.Sec. 126 of the Indian Contract Act, defines a contract of guarantee as "A contract to perform the promise, or discharge the liability of a third person in case of his defaults". A guarantee may be either "oral" or "written". Just like any other contracts, it should also fulfill all the essentials of a valid contract. As stated already, three parties are involved in a contract of guarantee.All the three parties namely, the principal debtor, the creditor and the surety must agree to make such a contract. A contract of guarantee pre-supposes the existence of a liability, which is enforceable at law. If no such liability exists, there can be no contract of guarantee. Thus, where the debt, which is sought to be guaranteed, is already time barred or void, the surety is not liable. There must be consideration between the creditor and the surety so as to make the contract enforceable. The consideration must also be lawful. In a contract of guarantee, the consideration received by the principal debtor is taken to be the sufficient consideration for the surety. Thus, any benefit received by the debtor is adequate consideration to bind the surety. But past consideration is no consideration for a contract of guarantee. There must be a fresh consideration moving from the creditor. A contract of guarantee may either be oral or written. In a contract of guarantee, liability of the surety is secondary, i.e. the creditor must first proceed against the debtor and if the latter does not perform his promise, then only he can proceed against the surety. It may be express or implied from the conduct of parties. The creditor should disclose to the surety the facts that are likely to affect the suretys liability. The guarantee obtained by the concealment of such facts is invalid. Thus, the guarantee is invalid if the creditor obtains it by the concealment of material facts The guarantee should not be obtained by misrepresenting the facts to the surety. Though the contract of guarantee is not a contract of uberrimae fidei, i.e. of absolute good faith, and thus, does not require complete disclosure of all the material facts by the principal debtor or creditor to the surety before he enters into a contract. But the facts, that are likely to affect the extent of suretys responsibility, must be truly represented.Q.BHK Pvt Ltd. gave notice to Pooja, the debtor-defendant and also threatened legal action against her, but her husband agreed to become surety and undertook to pay the liability and also executed a promissory note in their favor. The Bank refrained from threatened action. Decide.a)This is valid as promissory note constituted good consideration for the surety.b)This is not valid as consideration has to be in monetary form.c)This is not valid as a promissory note doesnt constitute consideration.d)None of the aboveCorrect answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for CLAT. Download more important topics, notes, lectures and mock test series for CLAT Exam by signing up for free.

Here you can find the meaning of The question is based on the reasoning and arguments, or facts and principles set out in the passage. Some of these principles may not be true in the real or legal sense, yet you must conclusively assume that they are true for the purpose. Please answer the question on the basis of what is stated or implied in the passage. Do not rely on any principle of law other than the ones supplied to you, and do not assume any facts other than those supplied to you when answering the question. Please choose the option that most accurately and comprehensively answers the question.Sec. 126 of the Indian Contract Act, defines a contract of guarantee as "A contract to perform the promise, or discharge the liability of a third person in case of his defaults". A guarantee may be either "oral" or "written". Just like any other contracts, it should also fulfill all the essentials of a valid contract. As stated already, three parties are involved in a contract of guarantee.All the three parties namely, the principal debtor, the creditor and the surety must agree to make such a contract. A contract of guarantee pre-supposes the existence of a liability, which is enforceable at law. If no such liability exists, there can be no contract of guarantee. Thus, where the debt, which is sought to be guaranteed, is already time barred or void, the surety is not liable. There must be consideration between the creditor and the surety so as to make the contract enforceable. The consideration must also be lawful. In a contract of guarantee, the consideration received by the principal debtor is taken to be the sufficient consideration for the surety. Thus, any benefit received by the debtor is adequate consideration to bind the surety. But past consideration is no consideration for a contract of guarantee. There must be a fresh consideration moving from the creditor. A contract of guarantee may either be oral or written. In a contract of guarantee, liability of the surety is secondary, i.e. the creditor must first proceed against the debtor and if the latter does not perform his promise, then only he can proceed against the surety. It may be express or implied from the conduct of parties. The creditor should disclose to the surety the facts that are likely to affect the suretys liability. The guarantee obtained by the concealment of such facts is invalid. Thus, the guarantee is invalid if the creditor obtains it by the concealment of material facts The guarantee should not be obtained by misrepresenting the facts to the surety. Though the contract of guarantee is not a contract of uberrimae fidei, i.e. of absolute good faith, and thus, does not require complete disclosure of all the material facts by the principal debtor or creditor to the surety before he enters into a contract. But the facts, that are likely to affect the extent of suretys responsibility, must be truly represented.Q.BHK Pvt Ltd. gave notice to Pooja, the debtor-defendant and also threatened legal action against her, but her husband agreed to become surety and undertook to pay the liability and also executed a promissory note in their favor. The Bank refrained from threatened action. Decide.a)This is valid as promissory note constituted good consideration for the surety.b)This is not valid as consideration has to be in monetary form.c)This is not valid as a promissory note doesnt constitute consideration.d)None of the aboveCorrect answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of The question is based on the reasoning and arguments, or facts and principles set out in the passage. Some of these principles may not be true in the real or legal sense, yet you must conclusively assume that they are true for the purpose. Please answer the question on the basis of what is stated or implied in the passage. Do not rely on any principle of law other than the ones supplied to you, and do not assume any facts other than those supplied to you when answering the question. Please choose the option that most accurately and comprehensively answers the question.Sec. 126 of the Indian Contract Act, defines a contract of guarantee as "A contract to perform the promise, or discharge the liability of a third person in case of his defaults". A guarantee may be either "oral" or "written". Just like any other contracts, it should also fulfill all the essentials of a valid contract. As stated already, three parties are involved in a contract of guarantee.All the three parties namely, the principal debtor, the creditor and the surety must agree to make such a contract. A contract of guarantee pre-supposes the existence of a liability, which is enforceable at law. If no such liability exists, there can be no contract of guarantee. Thus, where the debt, which is sought to be guaranteed, is already time barred or void, the surety is not liable. There must be consideration between the creditor and the surety so as to make the contract enforceable. The consideration must also be lawful. In a contract of guarantee, the consideration received by the principal debtor is taken to be the sufficient consideration for the surety. Thus, any benefit received by the debtor is adequate consideration to bind the surety. But past consideration is no consideration for a contract of guarantee. There must be a fresh consideration moving from the creditor. A contract of guarantee may either be oral or written. In a contract of guarantee, liability of the surety is secondary, i.e. the creditor must first proceed against the debtor and if the latter does not perform his promise, then only he can proceed against the surety. It may be express or implied from the conduct of parties. The creditor should disclose to the surety the facts that are likely to affect the suretys liability. The guarantee obtained by the concealment of such facts is invalid. Thus, the guarantee is invalid if the creditor obtains it by the concealment of material facts The guarantee should not be obtained by misrepresenting the facts to the surety. Though the contract of guarantee is not a contract of uberrimae fidei, i.e. of absolute good faith, and thus, does not require complete disclosure of all the material facts by the principal debtor or creditor to the surety before he enters into a contract. But the facts, that are likely to affect the extent of suretys responsibility, must be truly represented.Q.BHK Pvt Ltd. gave notice to Pooja, the debtor-defendant and also threatened legal action against her, but her husband agreed to become surety and undertook to pay the liability and also executed a promissory note in their favor. The Bank refrained from threatened action. Decide.a)This is valid as promissory note constituted good consideration for the surety.b)This is not valid as consideration has to be in monetary form.c)This is not valid as a promissory note doesnt constitute consideration.d)None of the aboveCorrect answer is option 'A'. Can you explain this answer?, a detailed solution for The question is based on the reasoning and arguments, or facts and principles set out in the passage. Some of these principles may not be true in the real or legal sense, yet you must conclusively assume that they are true for the purpose. Please answer the question on the basis of what is stated or implied in the passage. Do not rely on any principle of law other than the ones supplied to you, and do not assume any facts other than those supplied to you when answering the question. Please choose the option that most accurately and comprehensively answers the question.Sec. 126 of the Indian Contract Act, defines a contract of guarantee as "A contract to perform the promise, or discharge the liability of a third person in case of his defaults". A guarantee may be either "oral" or "written". Just like any other contracts, it should also fulfill all the essentials of a valid contract. As stated already, three parties are involved in a contract of guarantee.All the three parties namely, the principal debtor, the creditor and the surety must agree to make such a contract. A contract of guarantee pre-supposes the existence of a liability, which is enforceable at law. If no such liability exists, there can be no contract of guarantee. Thus, where the debt, which is sought to be guaranteed, is already time barred or void, the surety is not liable. There must be consideration between the creditor and the surety so as to make the contract enforceable. The consideration must also be lawful. In a contract of guarantee, the consideration received by the principal debtor is taken to be the sufficient consideration for the surety. Thus, any benefit received by the debtor is adequate consideration to bind the surety. But past consideration is no consideration for a contract of guarantee. There must be a fresh consideration moving from the creditor. A contract of guarantee may either be oral or written. In a contract of guarantee, liability of the surety is secondary, i.e. the creditor must first proceed against the debtor and if the latter does not perform his promise, then only he can proceed against the surety. It may be express or implied from the conduct of parties. The creditor should disclose to the surety the facts that are likely to affect the suretys liability. The guarantee obtained by the concealment of such facts is invalid. Thus, the guarantee is invalid if the creditor obtains it by the concealment of material facts The guarantee should not be obtained by misrepresenting the facts to the surety. Though the contract of guarantee is not a contract of uberrimae fidei, i.e. of absolute good faith, and thus, does not require complete disclosure of all the material facts by the principal debtor or creditor to the surety before he enters into a contract. But the facts, that are likely to affect the extent of suretys responsibility, must be truly represented.Q.BHK Pvt Ltd. gave notice to Pooja, the debtor-defendant and also threatened legal action against her, but her husband agreed to become surety and undertook to pay the liability and also executed a promissory note in their favor. The Bank refrained from threatened action. Decide.a)This is valid as promissory note constituted good consideration for the surety.b)This is not valid as consideration has to be in monetary form.c)This is not valid as a promissory note doesnt constitute consideration.d)None of the aboveCorrect answer is option 'A'. Can you explain this answer? has been provided alongside types of The question is based on the reasoning and arguments, or facts and principles set out in the passage. Some of these principles may not be true in the real or legal sense, yet you must conclusively assume that they are true for the purpose. Please answer the question on the basis of what is stated or implied in the passage. Do not rely on any principle of law other than the ones supplied to you, and do not assume any facts other than those supplied to you when answering the question. Please choose the option that most accurately and comprehensively answers the question.Sec. 126 of the Indian Contract Act, defines a contract of guarantee as "A contract to perform the promise, or discharge the liability of a third person in case of his defaults". A guarantee may be either "oral" or "written". Just like any other contracts, it should also fulfill all the essentials of a valid contract. As stated already, three parties are involved in a contract of guarantee.All the three parties namely, the principal debtor, the creditor and the surety must agree to make such a contract. A contract of guarantee pre-supposes the existence of a liability, which is enforceable at law. If no such liability exists, there can be no contract of guarantee. Thus, where the debt, which is sought to be guaranteed, is already time barred or void, the surety is not liable. There must be consideration between the creditor and the surety so as to make the contract enforceable. The consideration must also be lawful. In a contract of guarantee, the consideration received by the principal debtor is taken to be the sufficient consideration for the surety. Thus, any benefit received by the debtor is adequate consideration to bind the surety. But past consideration is no consideration for a contract of guarantee. There must be a fresh consideration moving from the creditor. A contract of guarantee may either be oral or written. In a contract of guarantee, liability of the surety is secondary, i.e. the creditor must first proceed against the debtor and if the latter does not perform his promise, then only he can proceed against the surety. It may be express or implied from the conduct of parties. The creditor should disclose to the surety the facts that are likely to affect the suretys liability. The guarantee obtained by the concealment of such facts is invalid. Thus, the guarantee is invalid if the creditor obtains it by the concealment of material facts The guarantee should not be obtained by misrepresenting the facts to the surety. Though the contract of guarantee is not a contract of uberrimae fidei, i.e. of absolute good faith, and thus, does not require complete disclosure of all the material facts by the principal debtor or creditor to the surety before he enters into a contract. But the facts, that are likely to affect the extent of suretys responsibility, must be truly represented.Q.BHK Pvt Ltd. gave notice to Pooja, the debtor-defendant and also threatened legal action against her, but her husband agreed to become surety and undertook to pay the liability and also executed a promissory note in their favor. The Bank refrained from threatened action. Decide.a)This is valid as promissory note constituted good consideration for the surety.b)This is not valid as consideration has to be in monetary form.c)This is not valid as a promissory note doesnt constitute consideration.d)None of the aboveCorrect answer is option 'A'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice The question is based on the reasoning and arguments, or facts and principles set out in the passage. Some of these principles may not be true in the real or legal sense, yet you must conclusively assume that they are true for the purpose. Please answer the question on the basis of what is stated or implied in the passage. Do not rely on any principle of law other than the ones supplied to you, and do not assume any facts other than those supplied to you when answering the question. Please choose the option that most accurately and comprehensively answers the question.Sec. 126 of the Indian Contract Act, defines a contract of guarantee as "A contract to perform the promise, or discharge the liability of a third person in case of his defaults". A guarantee may be either "oral" or "written". Just like any other contracts, it should also fulfill all the essentials of a valid contract. As stated already, three parties are involved in a contract of guarantee.All the three parties namely, the principal debtor, the creditor and the surety must agree to make such a contract. A contract of guarantee pre-supposes the existence of a liability, which is enforceable at law. If no such liability exists, there can be no contract of guarantee. Thus, where the debt, which is sought to be guaranteed, is already time barred or void, the surety is not liable. There must be consideration between the creditor and the surety so as to make the contract enforceable. The consideration must also be lawful. In a contract of guarantee, the consideration received by the principal debtor is taken to be the sufficient consideration for the surety. Thus, any benefit received by the debtor is adequate consideration to bind the surety. But past consideration is no consideration for a contract of guarantee. There must be a fresh consideration moving from the creditor. A contract of guarantee may either be oral or written. In a contract of guarantee, liability of the surety is secondary, i.e. the creditor must first proceed against the debtor and if the latter does not perform his promise, then only he can proceed against the surety. It may be express or implied from the conduct of parties. The creditor should disclose to the surety the facts that are likely to affect the suretys liability. The guarantee obtained by the concealment of such facts is invalid. Thus, the guarantee is invalid if the creditor obtains it by the concealment of material facts The guarantee should not be obtained by misrepresenting the facts to the surety. Though the contract of guarantee is not a contract of uberrimae fidei, i.e. of absolute good faith, and thus, does not require complete disclosure of all the material facts by the principal debtor or creditor to the surety before he enters into a contract. But the facts, that are likely to affect the extent of suretys responsibility, must be truly represented.Q.BHK Pvt Ltd. gave notice to Pooja, the debtor-defendant and also threatened legal action against her, but her husband agreed to become surety and undertook to pay the liability and also executed a promissory note in their favor. The Bank refrained from threatened action. Decide.a)This is valid as promissory note constituted good consideration for the surety.b)This is not valid as consideration has to be in monetary form.c)This is not valid as a promissory note doesnt constitute consideration.d)None of the aboveCorrect answer is option 'A'. Can you explain this answer? tests, examples and also practice CLAT tests.

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