law 2 Flashcards
A Contract of indemnity
whenever one party promises to save the other from
loss caused to him by the conduct of the promisor himself or by the
conduct of any other person is called a Contract of Indemnity
List the parties involved on Contract of Guarantee.
i) The person who gives the guarantee is “Surety”.
• ii) The person in respect of whose default the guarantee is given is
“Principal debtor”
• iii) The person to whom the guarantee is given is “Creditor”
Short note on Indemnifier and Indemnified
idemnifier: promises to bear the loss
indemified: someone who is compensated against the loss suffered
RIGHTS OF INDEMNITY HOLDER WHEN SUED
rights of revocering damages
costs
sums
Contract of Bailment
delivery of goods from one perform to other under the contract that the goods would be delivered after accomplishing the purpose or dispose them acc to the ins of the owner
bailee- to whom the person delivers the goods
bailor - the person who delivors the goods
RIGHTS OF PAWNEE
right of retainer reimbursement of expenses right in case of default by pawner a. suit b. sale of goods c. deficit of goods d. no notice right against true ownerof goods
RIGHTS OF A PAWNOR
reedeem goods pledged
enforce pawnee duties
increase in goods
right in receiving notices about sale
Is a minor can be employed as an agent? Comment your answer.
No person can employ an agent if he does not
possess capacity to contract. So a minor or person of unsound mind cannot become the agent
under section 183 of the Indian Contract Act.
DUTIES OF A PAWNOR
pay the debt
deficit on sale
disclose faults about the goods
indemnify the pawnee
DUTIES OF A PAWNEE
not to use the goods return the goods reasonable care for the goods do not mix the goods increase the goods
PLEDGE
Pledge is bailment of goods
for a specific purpose, i.e. to provide a
security for a loan or fulfillment of an
obligation
TYPES OF AN AGENCY CONTRACT
express agreement
implied agreement
agency by ratification
agency by operation of law
TYPES OF AN AGENCY CONTRACT
a. Agency by Estoppel
b. Wife as Agent
c. Agency of Necessity
CONTRACT OF GUARANTEE
“A contract of guarantee is a contract to perform the promise or to
discharge the liabilities of a third person in case of his default.
Difference between Contract of Indemnity and Contract of Guarantee
Basis of Comparison Indemnity Guarantee
Meaning Indemnity is a contract where one party promises to another that he or she will compensate the other for any kind of loss suffered by the act of the third party
Guarantee is a contract where a party promises the other that he or she will compensate for the loss or perform the contract if there is a default.
Defined in Section 124 of Indian Contract Act, 1872 Section 126 of Indian Contract Act, 1872
Parties 2, namely indemnifier and indemnified 3, namely creditor, principal debtor and surety
Number of contracts and details 1 3
Degree of liability of promisor in each case Primary Secondary
Maturity of liability When the contingency occurs. Liability is already in existence
Purpose To compensate for the loss To provide some kind of assurance to the promise
Discuss the nature, rights and liabilities of a Surety
NATURE OF SURETY:- Section 128 surety liability is coextensive with that of the principal debtor which means that on a default having been made by the principal debtor the creditor can recover from surety all what he could have recovered from the principal debtor
RIGHTS OF SURETY
rights of principal debotr
- Right of Subrogation
• After the payment of the debt to the creditor, the surety is subrogated to the
rights of the creditor i.e., he has the same rights as those of the creditors.
Therefore, he can sue the principal debtor to exercise those rights.
• 2. Right of Indemnity
• In every contract of guarantee, there is an implied promise by the principal
debtor to indemnify the surety i.e., to compensate the surety. Therefore,
upon the payment of debt of the principal debtor, the surety becomes
entitled to recover from the principal debtor, all the amount including
interest plus costs rightly paid to the creditor under the guarantee.
• 3. Right to be Relieved Earlier
• A surety can, even before making any payment, compel the debtor to
relieve him from liability by paying off the debt. But, before doing so, the
debt should be ascertained.
RIGHTS AGAINST CREDITOR
- Rights in Case of Fidelity Guarantee
- Before the Payment of the Debt Guaranteed
- Right to Claim Securities
- Right of Equities
RIGHTS AGAINST CO-SURETIES
- concurrence of a three party
- liability
- existence of debt
- no conceal of fact
- no misinterpretation
- ess of valid contract
- consideration
- writing not necessary
Describe the circumstances in which irrevocable of agency arise
with illustrations
1) By the act of the parties -
i) By agreement -
ii) By revocation of the principal (Sec. 201) –
iii) By Renunciation or revocation of an agent (Sec 206) -
2) By operation of law -
i) By the performance or completion of agency (Sec. 201) -
ii) By expiry of the time -
iii) Death or insanity of principal or agent (Sec. 209) -
iv) Insolvency of principal (Sec 201) –
v) Destruction of the subject matter -
vii) Dissolution of company or firm -
viii) Termination of sub-agent’s authority (Sec. 210) –
