New Click here to Enroll for SIDBI MSME Expert Classes by Experts

    Register

    Question

    What constitutes sufficient consideration for a

    guarantee?
    A A promise made for the benefit of the principal debtor Correct Answer Incorrect Answer
    B A promise made for the benefit of the surety only Correct Answer Incorrect Answer
    C Any promise or act performed for the benefit of the lender Correct Answer Incorrect Answer
    D A promise made by the principal debtor to the creditor Correct Answer Incorrect Answer
    E A promise made by the principal debtor to the surety Correct Answer Incorrect Answer

    Solution

    Explanation:Contract ActSection 127.   Consideration for guarantee: 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.

    Practice Next