Multiple choice

Which of the following is true?

  1. Bailor is the person who receives the goods as a security for the loan.

  2. When documents are delivered by a customer for safe custody to the bank and the bank takes due care, but there is loss to documents, the bank is liable to the customer.

  3. If the bailor has knowledge about the defect in the goods due to which bailee suffers loss, the bailor is liable.

  4. Bailee can use the goods as he likes and is not liable for damages for such use.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Bailor will not be liable for the defects which are not within his knowledge. However, if the bailor is aware about the defect, then he is liable to bailee. The bailor must disclose to the bailee any faults or defects in the goods. 

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