Question

X draw a bill of exchange on Y who accepts it, X endorsed it in favour of Z who in turn endorse it in favour of Y. The contract stands _________.

• A. cancelled due to identity of promisor and promisee
• B. discharged due to identity of promisor and promisee
• C. discharged by mistaken identity
• D. discharged due all the three reasons

Answer 1

Answer: (B)

discharged due to identity of promisor and promisee

A contract is discharged by the Identity of Promisor and Promisee i.e. when the promisor becomes the promisee, the other parties are discharged. In the present case X has drawn a bill of exchange on Y which means Y is promisor and the bill is endorsed in favor of Z who endorses it further in favor of Y which ultimately makes Y the promisee and hence, other parties are discharged and promisor has become promisee which discharges the contract.