Question

How should a payment be applied when neither party makes an appropriation as per the Contract Act?

Q: Answer-How should a payment be applied when neither party makes an appropriation as per the Contract Act?

Section 61 Application of payment where neither party appropriates Where neither party makes any appropriation, the payment shall be applied in discharge of the debts in order of time, whether they are or are not barred by the law in force for the time being as to the limitation of suits. If the debts are of equal standing, the payment shall be applied in discharge of each proportionally.

A It should be applied to the most recent debt first

B It should be applied in discharge of the debts in order of time, regardless of whether they are barred by the law on the limitation of suits. If the debts are of equal standing, the payment should be applied proportionally

C It should be divided equally among all debts

D It should be applied to the oldest debt that is not barred by law

E It should be applied to the largest debt first.

Practice Next