- 04/25/2019 at 1:55 pm #616979EduGorillaKeymasterSelect Question Language :
Directions: The question consists of two statements, one labelled as Principle(s) and the other as Facts. You are to examine the principle and apply it to the given facts carefully and select the best option.
1: A contract of guarantee is a contract to perform the promise or discharge the liability of a third person in case of his default. A guarantee may be either oral or written.
2: The person who gives the guarantee is called the surety, the person in respect of whose default the guarantee is given is called the principal debtor and the person to whom the guarantee is given is called the creditor. 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.
Facts: Anisha wants to buy a consignment of sports shoes from Kavya. Anisha asks her friend Sreeni to speak to Kavya in this regard, since Kavya and Sreeni have been business partners in the past. Sreeni asks Kavya to give Anisha the consignment and Sreeni personally guarantees that the payment will be made to her.
Which of the following statements is correct?
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- A valid contract of guarantee has arisen in this case.
- No valid contract of guarantee has arisen in this case.
- A valid contract of guarantee exists between Anisha and Sreeni only.
- The existence of the contract of guarantee depends on whether a copy of the same is available for examination.
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