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  • Niti borrows Rs1,000 from Mukesh and pledges her diamond necklace as collateral. They enter into a pawn</s

Niti borrows Rs1,000 from Mukesh and pledges her diamond necklace as collateral. They enter into a pawn

Option: 1

The Pawnee has the right to sell the pledged item if the Pawnor defaults on the loan.


Option: 2

The Pawnee has the right to use the pledged item during the loan period.


Option: 3

The Pawnor has the right to demand the return of the pledged item at any time.


Option: 4

The Pawnor has the right to transfer ownership of the pledged item to a third party.


Answers (1)

best_answer

The Pawnee has the right to sell the pledged item if the Pawnor defaults on the loan. In a pawn agreement, the Pawnee (the person holding the pledged item) has certain rights. If the Pawnor (the person who pledges the item as collateral) fails to repay the loan as agreed, the Pawnee has the right to sell the pledged item to recover the loan amount. This is known as the right of sale. Hence correct option is a.

Posted by

Divya Prakash Singh

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