Get Rid of 10 Legal Misconceptions in Financial Matters
5. Out-of-court settlement is the end result
Most of us believe that a case that has been settled outside the walls of the court cannot be challenged. But in case of fraud or coercion, one can file a complaint in court against such settlement. People go for out-of-court settlement as they are usually fast and can be solved by mutual understanding. However, if one of the parties discover that the deal is unfair, he can approach the court for justice. Same goes for arbitration and one can challenge the award on the grounds of invalid arbitration agreement or improper notice of the appointment of arbitrators.
6. Guarantor need not repay the loan
The Supreme Court has announced that the responsibility of the guarantor is same as that of the borrower in case the borrower is not able to repay the loan. Before becoming a guarantor for an acquaintance, one should check the borrower’s repayment history because the lender has the rights to recover his dues from the guarantor if the debtor fails to repay the amount taken. Nowadays, banks check the guarantor’s repayment history to issue a fresh loan to the later. Hence, one should not act as a guarantor for long term loans or if there is any doubt of the borrower’s capacity to repay.
7. Heirs enjoy a right over shares
As per a Bombay High Court ruling, the shares in a demat account will be passed to the nominee and not to the descendant of the concerned person. According to Section 109A of the Companies Act, even if the shareholder mentions the inheritor in the will, the right to shares goes to the nominee after the death of the original shareholder.
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