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CMA Intermediate · Business Laws and Ethics · Special Contracts - Indemnity and Guarantee; Bailment and Pledge; Laws of Agency

Under the Indian Contract Act, 1872, the bailment of goods as security for payment of a debt or performance of a promise is called a pledge. In this relationship, the bailee is called the:

The bailee in a pledge is called the pawnee. Section 172 defines pledge as bailment of goods as security for payment of a debt or performance of a promise, calling the bailor the pawnor and the bailee the pawnee.

  1. APawnor
  2. BPawneeCorrect
  3. CSurety
  4. DPrincipal

Explanation

Section 172 defines pledge as bailment of goods as security for payment of a debt or performance of a promise. The bailor is the pawnor and the bailee, who holds the goods as security, is the pawnee. A surety belongs to guarantee, not pledge.

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