Multiple choice

A appoints B as his agent and authorizes him to procure an insurance policy for Rs 15,000 on the factory. B procures a policy for Rs 15,000 on the factory and another for the same amount on the house. A is

  1. bound to pay the premium for the policy on factory only

  2. bound to pay premium on policies of factory as well as house

  3. bound to reject the whole transaction

  4. none of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

 A is bound to pay the premium on factory only, as a separate policy is taken by B on the house. But he did not authorize B to take policy on house and the transaction of factory can be separated from that of house. A is bound to pay the premium on policy of factory, so it is right answer here.

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