CMA Foundation · Fundamentals of Business Laws and Business Communication · Meaning of Indemnity, Guarantee, Pledge, Agent
Which of the following is a correct statement about the terms used in a pledge under the Act?
In a pledge, the bailor is called the pawnor and the bailee is called the pawnee. Terms such as surety and principal debtor belong to contracts of guarantee, not to pledge.
- AThe bailee is called the pawnor
- BThe bailor is called the pawnorCorrect
- CThe bailor is called the surety
- DThe bailee is called the principal debtor
Explanation
Section 172 states that in a pledge the bailor is called the pawnor and the bailee the pawnee. Surety and principal debtor are terms from Section 126 on guarantee, so they do not apply to pledge.
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