MGT611 Lecture-wise MCQs Lectures 19-45 by Ali Khan

Business and Labour Laws - MGT 611 · Lecture wise mcqs 19-45 · Ali Khan · Lesson 19 CONTRACT OF GUARANTEE & INDEMNITY

1. A contract of guarantee is a contract to perform the promise or discharge the liability of a third person in case of his default.

Who is the person giving the guarantee called?

a) Principal debtor

b) Creditor

c) Surety ✅

d) Agent

2. In a contract of guarantee, the person in respect of whose default the guarantee is given is called:

a) Guarantor b) Principal debtor ✅ c) Creditor

d) Bailor

3.

A guarantee may be given in which of the following forms? a) Oral only

b) Written only c) Either oral or written ✅

d) Only in electronic form

4. Which of the following is NOT an essential element of a contract of guarantee? a) Consideration

b) Free consent c) Writing is mandatory ✅

d) No misrepresentation

5.

In a contract of guarantee, the primary liability is on which party? a) Surety

b) Creditor c) Principal debtor ✅

d) Agent

6.

A secondary contract in a contract of guarantee exists between:

a) Principal debtor and creditor b) Surety and creditor ✅

c) Creditor and bank

d) Bank and principal debtor 7. If the surety pays the debt of the principal debtor, he gets the right to recover the amount from the: a) Creditor

b) Government c) Principal debtor ✅

d) None of the above

8.

Which of the following is a valid example of a contract of guarantee?

a) Loan taken by a person with a guarantor ✅

b) Selling a car on installments

c) Opening a bank account

d) All of the above

9. If a contract does not have a principal debtor, it cannot be considered a: a) Contract of sale

b) Contract of bailment c) Contract of guarantee ✅

d) Contract of indemnity

Q10. Which of the following types of guarantee covers a series of transactions? a) Specific Guarantee

1. Continuing Guarantee ✅
2. Personal Guarantee
3. Implicit Guarantee

Q11. A surety can be held liable even if the creditor has not exhausted all legal remedies against the: a) Court

1. Principal debtor ✅