Question

Where a wife borrows money to manage necessary family expenses in a reasonable manner, the husband shall be liable to repay the debt to its creditor under implied authority of borrowing.
Consider the above statement and choose correct answer.

• A. Husband is liable as principal for the act of wife as agent under the principle of agency
• B. Husband is liable as surety for the act of wife as debtor under the contract of guarantee
• C. Husband is liable as master for the act of wife as servant under the principle of vicarious liability
• D. Husband is not liable to repay debt

Answer 1

Answer: (A)

Husband is liable as principal for the act of wife as agent under the principle of agency

Answer 2

Under the principle of agency, the husband may be held liable as the principal when the wife borrows money for necessary family expenses.