Contract of Pledge & Agency
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Banking Regulations and Business Laws — CAIIB.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What is a contract of pledge under the Indian Contract Act, 1872?
A pledge is a bailment of goods as security for payment of a debt or performance of a promise, where the bailor is called the pledgor and the bailee is called the pledgee.
What is the right of a pawnee to sell pledged goods on default?
Pawnee may sell after giving reasonable notice to pawnor.
Under what section of the Indian Contract Act is pledge defined?
Pledge is defined under Section 172 of the Indian Contract Act, 1872.
Under which section of the Indian Contract Act can a pawnee sue the pawnor for the debt?
Section 176 allows pawnee to sue and retain goods as collateral.
Who is a pawnor and who is a pawnee in a contract of pledge?
The person who delivers goods as security for a debt is called the pawnor, and the person to whom goods are delivered as security is called the pawnee.
What is the pawnor's right to redeem goods before sale by the pawnee?
Pawnor can redeem at any time before actual sale of goods.
What right does a pawnee have if the pawnor defaults on the loan?
As per Section 176, on default the pawnee may sue the pawnor for the debt or sell the pledged goods after giving the pawnor reasonable notice of the sale.
What happens when a pawnee sells pledged goods at a price lower than the debt?
Pawnee can sue pawnor for the remaining deficiency amount.
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