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Law of special contracts
 

Law of special contracts

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    Law of special contracts Law of special contracts Presentation Transcript

    • 1. CONTRACT OF INDEMNITY 2. CONTRACT OF GUARANTEE 3. CONTRACT OF BAILMENT 4. CONTRACT OF AGENCY
    •  DEFINITION S.124 – A contract of indemnity is a contract whereby 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.
    •  1) 2)  1) 2) 3) PARTIES TO CONTRACT Indemnifier Indemnified / Indemnity Holder RIGHT OF INDEMNITY HOLDER WHEN SUED (S.125) All Damages All Costs All Sums
    •  FEATURES OF INDEMNITY 1) It must possess all ingredients of a valid agreement. It is a contingent agreement to make good the loss. The loss must be caused by human conduct only. Loss must have actually been suffered. 2) 3) 4)
    • DEFINITION S.126 – “A contract to perform the promise or discharge the liability of a third person in case of his default.
    • STATUTE S.128 of The Indian Contract Act, 1872 states that “the liability of the surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract.
    • PARTIES TO CONTRACT  SURETY – The person who gives the guarantee.  PRINCIPAL DEBTOR – The person for whom the guarantee is given.  CREDITOR – The person to whom the guarantee is given.
    • KINDS OF GUARANTEE  SPECIFIC – It is intended to be applicable to a particular debt and thus comes to an end on its repayment. It is irrevocable  CONTINUING – It extends to a series of transactions. It is revocable regarding future transactions.
    • RIGHTS OF A CREDITOR  Payment from surety as soon as the principal debtor refuses to pay or makes default in payment.  Where surety is insolvent, creditor is entitled to proceed in the surety’s insolvency & claim the pro-rata dividend.
    • RIGHTS OF SURETY  AGAINST CREDITOR – In case of fidelity guarantee, surety can direct creditor to dismiss the employee whose honesty he has guaranteed and employee has been proved dishonest.  AGAINST CO-SURETIES – When a debt is guaranteed by more than one person they are called co-sureties. They have a right of contribution’ between them. When a surety has paid more than his share, he has a right of contribution from the other sureties who are equally bound to pay with him. If one of the sureties become insolvent, the solvent co-sureties have to contribute the amount equally.
    • AGAINST PRINCIPAL DEBTOR – •RIGHT OF SUBROGATION: Surety is subrogated to all the rights which the creditor had against the principal debtor. •RIGHT TO BE INDEMNIFIED: Surety has a right to recover from the principal debtor, the amounts which he has rightfully paid under the contract of Guarantee.
    • DISCHARGE OF SURETY The liability of a surety under a contract of guarantee may at any time be revoked by the surety, as to the future transactions by notice to the creditor: By death of surety By variance in terms of contract By release or discharge of principal debtor By compounding with, or giving time to, or agreeing not to sue principal debtor By creditors act or omission impairing surety’s eventual remedy. Loss of security
    • DEFINITION – S.148 The delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished be returned or otherwise be disposed off according to the directions of the person delivering them.
    • PARTIES TO THE CONTRACT Bailor Bailee FEATURES Delivery of goods Contract Return of goods in specie
    • KINDS OF BAILMENT Safe Deposit – Depositum Lending – Commodation Hire – Locatio et Conductio Pledge or Pawn – Vadium Reward – Mondatum
    • RIGHTS / DUTIES OF BAILOR Disclosure of faults Repayment of necessary expenses Responsibility for loss RIGHTS / DUTIES OF BAILEE To take care of goods Not to make unauthorised use of goods Not to mix goods bailed To return goods bailed To return excess profits Not to set up an adverse title
    • TERMINATION OF BAILMENT On expiry of the stipulated period. On the accomplishment of the specified purpose. By bailee’s act inconsistent with conditions. Termination of gratuitous bailment.
    • DEFINITION – S.182 An agent is a person employed to do an act for another or to represent another in his dealings with third person. The person for whom such act is done or who is so represented is called the principal.
    •  General Agent  Special Agent  Co-Agent  Broker  Auctioneer  Commission Agent  Del-credre Agent
    • DUTIES OF AN AGENT  Follow instructions of principal  Conduct business with care & skill  Remit Sums  Not to make secret profit  Communication with principal in emergency  Avoid conflict of interest  Duty not to delegate
    •  Right To Remuneration  Right Of Lien  Right Of Retainer  Right To Be Indemnified  Right To Be Compensated
    • Express Agreement Implied Agreement By Necessity By Estoppel By Holding Out By Ratification
    • ACT OF THE PARTIES  Principal Revoking Agent’s Authority  Agent Renouncing Business of Agency OPERATION OF LAW  Completion Of Business of Agency  By Efflux of Time  Destruction of Subject Matter  Death Or Insanity Of Agent Or Principal  Insolvency of Principal
    • CONDITIONS UNDER WHICH AGENCY CANNOT BE TERMINATED  Agency Coupled With Interest – S.202  Authority Partially Exercised – S.203  Express Contract – S.205
    • THE END !!!