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Legal Aspects of Business MCQ - Legal Aspects of Business Section 1

26 A, an insurance broker, employed by B to effect an insurance on a ship, omits to see that usual clauses are inserted in the policy. The ship is afterward lost. In consequence of the omission of the clauses, nothing can be recovered from the underwriters.

27 A, as surety for B, makes a bond jointly with B to C, to secure a loan from C to B. Afterwards, C obtains from B a further security for the same debt. Subsequently, C gives up further security.

28 A, at Madras, by letter directs B to sell for him some cotton lying in a warehouse in Bombay, and afterward, by letter revokes his authority to sell, and directs, B to send, the cotton to Madras, B, after receiving the second letter, enters into a contract with C, who knew of the first letter, but not of the second for the sale to him of the cotton. C pays B the money, with which B absconds.

29 A owns a shop in Serampur, living himself in Calcutta, and visiting the shop occasionally. The shop is managed by B, and he is in the habit of ordering goods from C in the name of A for the purposes of the shop, and of paying for them out of A’s funds without A’s knowledge.

30 A contract to indemnify B against the consequences of any proceedings which C may take against B in respect of a certain sum of 200 rupees.

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Question:

A stipulation in a bond for payment of compound interest on failure to pay simple interest at the same rate as was payable upon the principal is not…

A. Section 74 of the Indian Contract Act, 1872
B. Section 75 of the Indian Contract Act, 1872
C. Section 76 of the Indian Contract Act, 1872
D. None of these

Correct answer: A

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