Legal Aspects of Business - Legal Aspects of Business Section 1

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51. A gives B a bond for the repayment of Rs. 1,000 with interest at 12 percent at the end of six months, with a stipulation that, in case of default, interest shall be payable at the rate of 75 percent from the date of default. This is a stipulation by way of penalty.

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52. A gives to C a continuing guarantee to the extent of 3,000 rupees for any oil supplied by C to B on credit. Afterward, B becomes embarrassed, and, without the knowledge of A, B and C contract that C shall continue to supply B with oil for ready money, and that the payments shall be applied to the then, existing debts between B and C.

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53. A guarantees C against the misconduct of B in an office to which B is appointed by C, and of which the duties are defined by an Act of the Legislature. By a subsequent Act, the nature of the office is materially altered. Afterward, B misconduct’s himself.

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54. A guarantees payment to B, a tea-dealer, to the amount of Rs. 100, for any tea he may from time to time supply to C. B supplies C with tea to above the value of Rs. 100, and C pays B for it. Afterward B supplies C with tea to the value of Rs. 200. C fails to pay.

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55. A guarantee to B, the extent of 10,000 rupees, that C shall pay all the bills that B shall draw upon him. B draws upon C, C accepts the bill. A gives notice of revocation. C dishonors the bill at maturity.

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