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    Question

    How should a payment be applied when neither party makes an appropriation as per the Contract Act?

    A It should be applied to the most recent debt first Correct Answer Incorrect Answer
    B It should be applied in discharge of the debts in order of time, regardless of whether they are barred by the law on the limitation of suits. If the debts are of equal standing, the payment should be applied proportionally Correct Answer Incorrect Answer
    C It should be divided equally among all debts Correct Answer Incorrect Answer
    D It should be applied to the oldest debt that is not barred by law Correct Answer Incorrect Answer
    E It should be applied to the largest debt first. Correct Answer Incorrect Answer

    Solution

    Section  61 Application of payment where neither party appropriates: Where neither party makes any appropriation, the payment shall be applied in discharge of the debts in order of time, whether they are or are not barred by the law in force for the time being as to the limitation of suits. If the debts are of equal standing, the payment shall be applied in discharge of each proportionally.

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