the presentation contains following points: Contract of Bailment Contract of Indemnity Contract of Guarantee Pledge Contract of Agency

1. Special
Cont ract
Business Law

2. I would like to express my special thanks of gratitude to my
mentor (Pragya Bhargav Ma’am) who gave me the golden
opportunity to do this wonderful project on the topic (Indian
Contract act,1872 - Special Contract),which also helped me in
doing a lot of Research and I came to know about so many new
things I am really thankful to them.
Secondly I would also like to thank my parents who helped me a
lot in finalizing this project within the limited time frame.
Acknowledgement:

3. Content:
• Contract of Bailment
• Contract of Indemnity
• Contract of Guarantee
• Pledge
• Contract of Agency

4. Contract of Bailment
Sec. 148

5. Bailment -
The word Bailment is derived from the French word “ballier”
which means “to deliver” .
Bailment means 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 disposed
of according to the instructions of the person delivering them.
The person delivering the goods is called the ‘bailor’ and
the person to whom they are delivered is called the ‘bailee’.

6. Essential of Bailment-
Contract.
Goods.
Delivery of Goods.
Purpose.
Return of goods.
Return of same goods.

7. Duties of Bailor -
To disclose known faults.
To bear extraordinary expenses of bailment.
To indemnify bailee for loss in case of pre mature termination
of gratuitous bailment.
To receive back the goods.
To indemnify the bailee

8. Rights of Bailor -
Enforcement of rights.
Avoidance of contract. (Sec153)
Return of goods lent gratuitously. (Sec 159)
Compensation from a wrong –doer. (Sec 180)

9. Duties of Bailee -
Take care of goods bailed.
Indemnify in case of negligence.
Not make unauthorized use of goods.
Not mix goods with his own goods.
Return goods.
Return increase or profit from goods.
Not set up adverse title.

10. Rights of Bailee -
Delivery of goods to one of several joint bailor of
goods. (Sec 165).
Delivery of goods to bailor without title. (Sec 166).
Right to apply to court to stop delivery. (Sec 167)
Right to action against trespassers. (Sec 180)
Bailee’ s lien.

11. Termination of contract of bailment -
• Expiry of time.
• Accomplishment of purpose.
• Breach of warrantee.
• Inconsistent act.
• Distraction of subject of matter.
• Death of bailor / bailee.

12. Contract of Indemnity
Sec.124&125

13. Contract of indemnity {Sec.124}
A contract by which one party is promises
to another to save him from loss caused to
him by the conduct of the promisor
himself , or by the conduct of any other
person .

14. Essential elements of indemnity contract:
Two parties.
Legal relationship.
Free consent.
Competence.
Consideration.
Lawful objective.
Express or implied.
Compensation of loss.

15. Two Parties are:
1. Indemnity holder :
who bears loss.
Who is promisee.
Who receive compensation.
2. Indemnifier :
•who pay compensation for indemnity’s loss.
•who is promisor.

16. Indemnifier
(Promisor)
Indemnifier
(Promisor)
Indemnity
holder
(Promisee)
Indemnity
holder
(Promisee)
Contract
Compensation
paid
Contract for
compensation

17. Rights of Indemnity Holder{Sec.125}
Damages :
In this indemnity holder take his compensation for loss.
Cost :
Sometimes indemnifier refuses to paid compensation. In this situation
indemnity holder sue case for compensation.
In sued the case the overall expenses incurred is taken by indemnifier also
with claim money.
Sums :
Sometimes indemnity holder may compromise due to damage.
In this situation compromisation money also taken from indemnifier.

18. Rights of indemnifier:
The ICA,1872 is silent for rights of indemnifier. The rights of
indemnifier is similar has rights of surety.
1.Right of Sub-rogation: Sub-rogation is a process where
rights will get shifted from one person to the other. It means that
after compensating indemnity holder for his loss, the indemnifier
has right to sue third party who is liable for that.
2.Right to refuse indemnity: Sometimes loss suffered by
indemnity holder is beyond the contract, in this case indemnifier
has right to refuse for compensation.

19. Contract of Guarantee

20. Contract of Guarantee :
A contract of guarantee is a contract to perform the
promise, or discharge the liability , of a third person
in case of his default.

21. Surety
(who gives guarantee)
Principal Debtor
(for whom guarantee is
given)
Creditor
(To whom guarantee is given)
Three parties in contract of guarantee are:
Contract
Contract
Contract

22. Essential elements of Contract of guarantee:
Three parties.
Three contract.
Express or implied.
Legal relationship.
Free consent (Sec.13).
Competent (not compulsory for principal debtor).
Consideration[Sec.2(d)].
Legal objective.

23. • Unilateral Contract of Commercial Credit (for trade transaction).
• Bank Guarantee(for contract of tender).
• Letter of Credit(for international trade).
• Absolute Performance Bonds.
• Retrospective Guarantee(for existing obligation).
• Prospective Guarantee(for future obligation).
• Specific Guarantee(for single transaction).
• Continuing Guarantee (for more than single debt).
Types of contract of guarantee:

24. I. Rights against principal debtor:
Right to give Notice
Rights of Sub-rogation
Right of Indemnity
Right to get Securities
Right to ask for Relief
II. Rights against creditor:
 Right to get Securities
 Right to ask for Set-off
 Rights of Sub-rogation
 Right to advice to Sue Principal Debtor
 Right to insist on Termination of Services
III. Rights against Co-Sureties:
Right contribute equally
Rights of surety:

26. Difference between Contract of Indemnity
& Contract of guarantee
S.no
Basis
Contract of Indemnity Contract of guarantee
1 Meaning
There is a contract between two
parties for compensation of loss
There are a contracts between
three parties for paying liability
2 Section Sec.124&125 Sec.126
3 No. of parties Two parties Three parties
4 No. of Contract One contract Three contract
5 Related with
It is related with damage It is related with payment of
liability

27. PLEDGE
Sec.172

28. This is a special type of bailment contract , in
which the bailment of goods as security for
payment of a debt or performance of a promise .
Pledge

29. Parties in pledge:
Pawnor:
• The person who pledge the goods as security for payment of
debt.
• This is also called pledger.
Pawnee:
• The person who receives goods as security for payment of goods.
• This is also called pledgee.

30. Essential elements of pledge:
Bailment of security.
Goods.
Delivery.
Delivery under contract.
Two parties.
Free consent.
Legal relationship.
Competent.
Lawful objective.
Consideration.

31. Rights of Pawnee:
To retain the goods for subsequent advance.
To retain the goods.
To receive the extra-ordinary expenses.
To sale the goods.
To recover the balance.

32. Rights of Pawnor:
oTo get back the goods.
oTo retain the goods.
oTo take care and preserve the goods.
oTo receive increase/profit from the goods.
oTo exercise rights of debtor.

33. Duties of Pledgee(Pawnee):
To take care of goods.
Not to use the goods for personal use.
Not to mix the goods.
To return the goods after payment.
To return the increase/profit .
To give notice before sale of goods.
To act in a good faith.

34. Duties of Pawnor:
 To disclose the defects in the goods.
 To pay the debt ; interest and other expenses at the time
specified.
 To pay extra-ordinary expenses.
 To pay the balance of debt.

35. Contract of Agency
Sec.182

36. Contract of Agency:
An agent as a person employed to do any act for
another , or to represent another in dealings
with third persons the person for whom such
act is done is s called the principal

37. Essential elements of Contract of Agency:
• Name of relation between agent and his principal.
• Agreement , not necessarily a contract.
• Competence of the principle.
• Free consent.
• Consideration not necessary.
• Intention to create contractual relations and other essentials.

38. General Agent
Specific Agent
Co-agent
Broker
Commercial Agent
Auctioneer
Kinds of agent

39.  Right to remuneration.
 Right of lien.
 Right of retainer.
 Right to be indemnified.
 Right to be compensated.

40. Duties of Agent:
Follow instructions of principal.
Conduct business with care & skill.
Not to make secret profits.
Communicate with principal in case of emergency.
Not to delegate duties.
Avoid conflict of interest.
Not to set adverse title.
To be liable for misrepresentation or fraud.
To compensate for neglect, misconduct etc.

41. To direct the agent for conduct of business (sec.211).
To claim compensation for loss caused him due to agent’s
negligence or misconduct (sec. 212).
To claim all sums received by the agent on his behalf (sec.217).
To empower his agent to employ sub-agent (sec.190).
To demand proper accounts of business of agency(sec.213) .
To hold the agent liable for unauthorized appointment of sub-
agent(sec.193) .
Rights of principal:

42. Towards agent:
To pay remuneration to his agent.
To indemnify the agent against the consequences of lawful acts.
To indemnify the agent in respect of injury caused by his neglect or
want of skill.
Towards Third party:
 To be bound by acts of agent acting within the scope of his authority.
 To be bound by misrepresentation or fraud of his agent in the course
of his employment.
 To be bound by notice given to the agent.
 To be responsible for contracts entered into by agent through his
name is not disclosed.
Duties of Principal:

43. Types of Agency:
1. Agency by express agreement.
2. Agency by implied agreement:
Agency by estoppel.
Agency by holding out.
Agency by necessity.
3. Agency by ratification.
4. Agency by operation of law.

44. Termination of agency:
Termination by acts of parties:
1. By mutual agreement.
2. Revocation by principal.
3. Renunciation by agent
Termination by operation of law:
a. Completion of agency business.
b. Death of agent/principal.
c. Winding up of company or dissolution of firm.
d. Expiry of time.
e. Insolvency of principal.
f. Principal becomes an alien enemy.
g. Destruction of subject matter.
h. Insanity(Principal or agent becomes of unsound mind).

45. Conditions when agency is not terminated:
o Agency coupled with interest (sec.202).
o Authority partially exercised (sec.203).
o Express contract(sec.205).

47. Presented by :
Yamini Kahaliya
BBA (Honors)