Source: ICAI Module5 Marks
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Question Scenario

A agrees to sell goods to B on the guarantee of C for the payment of the price of goods in default of B. Is the agreement of guarantee valid in each of the following alternate cases: Case 1. If A is a Minor Case 2: If B is a Minor Case 3: If C is a minor

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Suggested Answer

Case 1: The agreement of guarantee is void because the creditor is incompetent to contract. Case 2: The agreement of guarantee is valid because the capability of the principal debtor does not affect the validity of the agreement of the guarantee. Case 3: The agreement of guarantee is void because the surety is incompetent to contract.

Exam Strategy Tip

When answering law questions in the CA Foundation exam, follow the "Provision -> Facts -> Conclusion" structure for maximum marks. Ensure to state the relevant sections where applicable to earn bonus marks from the evaluator.

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