Legal Principle: a Judgment Which Binds Only the Parties to a Suit in Which the Judgment Was Passed is Called Judgment in Personam; Whereas a Judgment Which Binds All Men Irrespective of Whether They - Legal Reasoning

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Given below is the statement of Legal principle followed by a factual situation. Apply the principle to the facts given below and select the most appropriate answer.
LEGAL PRINCIPLE: A judgment which binds only the parties to a suit in which the judgment was passed is called judgment in personam; whereas a judgment which binds all men irrespective of whether they were party to suit or not is known as a judgment in rem.
FACTUAL SITUATION: "Judgment of a competent court determining contractual obligations of the parties to a contract is an example of judgment in personam, but a judgment of a competent court declaring a party to be insolvent is an example of judgment in rem."
Comment on the correctness of this statement.


  • The statement is incorrect because a judgment relating to contract is a judgment in rem as it binds both the parties to the suit as well as the strangers. But a judgment relating to insolvency applies only to the person who has been adjudged to be insolvent; hence it is a judgment in personam.

  • The Statement is wrong as both the judgments are judgments in rem as both binds not only the parties to the suit but also others.

  • The Statement is wrong as both the judgments are judgments in personam as both the judgments bind not only the parties to the suit but not the others.

  • The statement is correct.

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The statement is correct.

Concept: Important Court Decisions (Entrance Exams)
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