Multiple Choice Questions on A undertakes to repay B a loan of Rs 1 000 in five equal monthly installments with a stipulation tha........... for Judicial Services Exam (JS) Preparation

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Multiple Choice Questions

A undertakes to repay B a loan of Rs 1 000 in five equal monthly installments with a stipulation tha...........

Indian Contract Act (ICA)1872 Consideration of Contract
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    A undertakes to repay B a loan of Rs. 1,000/- in five equal monthly installments with a stipulation that in default of payment of any installment the whole sum  shall  become due. A makes default in payment and B wants to enforce the contract.

    The stipulation is in the nature of a penalty and cannot be enforced.

    Incorrect Answer

    The stipulation is not in the nature of a penalty and can be enforced. 

    Correct Answer

    B is entitled to get reasonable compensation from A, which the court deems proper in the circumstances of the case.

    Incorrect Answer

    B is not entitled to get any compensation and he is entitled to get his sum due only.

    Incorrect Answer
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    Explanation:

    The stipulation is not in the nature of a penalty and can be enforced. 

    By: Parvesh Mehta
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