Multiple Choice Questions on Under a bond given for repayment of a sum of Rs 1000 it is stipulated that amount will be paid by th........... for Judicial Services Exam (JS) Preparation

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Multiple Choice Questions

Under a bond given for repayment of a sum of Rs 1000 it is stipulated that amount will be paid by th...........

Indian Contract Act (ICA)1872 Performance of a Contract
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    Under a bond given for repayment of a sum of Rs. 1000, it is stipulated that amount will be paid by the end of one year, otherwise the rate of interest would be 50 percent, Default is made and the creditor claims 50 percent interest.

    The creditor is entitled to claim on forfeiture clause.

    Incorrect Answer

    Since all stipulations under a contract are enforceable, the creditor is entitled to 50 percent interest.

    Correct Answer

    Such stipulations are unconscionable and the creditor is entitled to reasonable interest only.

    Incorrect Answer

    The stipulation is in the nature of liquidated damages and the creditor can claim without the stipulated amount.

    Incorrect Answer
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    Explanation:

    Since all stipulations under a contract are enforceable, the creditor is entitled to 50 percent interest.

    By: Parvesh Mehta
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