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Business Studies

Important Laws

A became sure...

Question

A became surety to the firm .of NC Mookerji for Bs conduct as cashier to the firm. The constitution of the firm subsequently underwent a change. Two sans of N. Mookerji. Were admitted as partners and its name was altered to N. Mookerji and Sons. Subsequently B defalcated. is A liable for Bs defalcation?

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Solution

Solution.:Section to which the given problem. relates: Section 38.
Decision: No.
Reason: A continuing guarantee is revoked as to the future transactions from the date of any change in the constitution of the firm.

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