Parties of indemnity Indemnifier: Person giving promise Indemnified: Person receiving promise Nature of Indemnity It is a type of contingent contract. Right of Indemnity holder Sec - 125 Indemnity Holder Is Entitled To Recover : All damages All sums paid as compromise to such suit.
Sec - 126
Makes a Promise
To another person
To pay some money
If some other person
Makes default in payment of money
Payable by him
E.G. Surety in loan agreements
Types Of Guarantee
Guarantee: For a single transaction.
Guarantee: For many transactions
It may be for a fixed time
It may be revoked
After revocation it will not apply to future transactions
It remains applicable for past transactions
Parties The person to whom guarantee is given sec - 126 Creditor person for whose default guarantee is given sec 126 . Debtor “ is person who gives the guarantee” [section 126] . Surety
Rights Of Sureties Against Debtor Subrogation – sec 140 Indemnity – sec 145. Against creditor Claim security Setoff Against co-sureties Equal contribution Sec 146
Discharge of Surety
Revocation -- notice to the creditor Sec -130
Specific guarantee cannot be revoked.
Continuing guarantee -- revoked by death of surety, sec 131
Substituting new contract Sec 62.
Conduct of the creditor
Variation -- without the surety’s consent Sec 133.
Creditor makes a composition with debtor Sec 135.
Creditors losses security given to him. Sec 141.
By invalidation of contract of guarantee Sec 142.
Delivery of goods
By one person to another
For some purpose ,
They shall be returned
According to the directions of the person delivering them
MEANING : Sec 148
Same goods to be returned but form of goods may be changed. E.g. when cloth is stitched by tailor. Characteristics of bailment Person delivering goods is called the “ bailor ” Person to whom they are delivered is called the “ bailee ”. Sec 148 Parties
Placing an ornament in a bank locker is not bailment. Deposit of money in a bank is not bailment. Examples :