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Which section of the Indian Contract Act, 1872 applies a payment to debts in order of time when neither…

The default is in section 61 of the Indian Contract Act, 1872. The oldest debts are paid first, and debts of equal standing are paid proportionately. Section 59 concerns the…

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Which section of the Indian Contract Act, 1872 applies a payment to debts in order of time when neither party has appropriated it?

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Answer and explanation

Correct answer D

The default is in section 61 of the Indian Contract Act, 1872. The oldest debts are paid first, and debts of equal standing are paid proportionately.

Section 59 concerns the debtor's express or implied appropriation, which is a different situation.

Option feedback

Option A

Section 62 deals with novation, rescission and alteration of a contract.

Option B

Section 59 applies when the debtor identifies the debt, expressly or by implication, and the creditor accepts the payment.

Option C

Section 58 concerns an alternative promise with an illegal branch.

Option D

Section 61 applies when neither party appropriates the payment. It applies payment in order of time and proportionately where debts are of equal standing.

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