- 1 Marks
BCL – L1 – SA – Q52 – Contract Law
Question
Where the debtor does not expressly intimate or where the circumstances attending on a payment do not indicate any intention, the creditor
A may apply it to any lawful debt due.
B May apply it even to a time barred debt.
C Both A and B
D None of the above
Answer
A
Explanation:
The correct answer is A because, under contract law, if a debtor does not specify how a payment should be applied, the creditor has the right to apply it to any lawful debt that is due. This principle ensures flexibility for the creditor in managing outstanding debts. Option B is incorrect because a time-barred debt is not enforceable, and applying payment to it would not be lawful. Option C is incorrect as it includes B, and D is incorrect as A is valid.
- Tags: Contract Law, Creditor Rights, Debt Allocation, Payment Application
- Level: Level 1
- Topic: Contract Law
- Uploader: Samuel Duah