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      Question

      Which of the following statements regarding a pawnee is

      correct?
      A A pawnee can retain pledged goods for any debt, regardless of the contract terms Correct Answer Incorrect Answer
      B A pawnee can retain goods only for the debt or promise for which they were pledged, unless otherwise agreed Correct Answer Incorrect Answer
      C A pawnee may retain pledged goods for any debt incurred after the goods were pledged, regardless of the agreement Correct Answer Incorrect Answer
      D A pawnee can retain goods for any purpose, as long as the pledge is not violated Correct Answer Incorrect Answer
      E A pawnee can keep goods until the contract is formally revoked by the pledgee Correct Answer Incorrect Answer

      Solution

      Explanation: Contract Act Section 174.   Pawnee not to retain for debt or promise other than that for which goods pledged: The pawnee shall not, in the absence of a contract to that effect, retain the goods pledged for any debt or promise other than the debt or promise for which they are pledged; but such contract, in the absence of anything to the contrary, shall be presumed in regard to subsequent advances made by the pawnee.

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