Site navigation

X sells his house to Y and clause 10 in the Sale Deed provides that, in case of any statutory dues is…

The clause creates an indemnity. X undertakes to protect Y against the financial burden of statutory dues relating to the period before the sale. An indemnity compensates…

Choose your answer

X sells his house to Y and clause 10 in the Sale Deed provides that, in case of any statutory dues is claimed against Y for the period prior to the sale, X will compensate for the same. This clause is:

Select one answer
Answer and explanation

Correct answer A

The clause creates an indemnity. X undertakes to protect Y against the financial burden of statutory dues relating to the period before the sale. An indemnity compensates the protected party for the specified loss. A guarantee instead answers to a creditor for another person's obligation on that person's default; the stated clause does not create that relationship.

Practice for these exams

Related question papers

Related exam syllabi

Related questions in this topic