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A, who owes money to B, a money-lender, undertakes to repay him by delivering 10 maunds of grain on a…

Illustration (e) to section 74: the stipulation is a penalty, and "B is only entitled to reasonable compensation in case of breach". Doubling the quantity on default is a…

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A, who owes money to B, a money-lender, undertakes to repay him by delivering 10 maunds of grain on a certain date, and stipulates that, if he does not deliver it on that date, he shall deliver 20 maunds. A fails to deliver on the date. What is B entitled to?

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Correct answer A

Illustration (e) to section 74: the stipulation is a penalty, and "B is only entitled to reasonable compensation in case of breach". Doubling the quantity on default is a sum named for breach, so section 74 limits B to reasonable compensation not exceeding it. B cannot insist on 20 maunds as of right.

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