1. Contract of Indemnity
To indemnify means to compensate or make the good
losses. A contract of indemnity refers to promise made
by one person to make good any losses or damages
another has incurred.
According to section 124 of contract Act “ A contract of
indemnity is a contract by which one party promise to
save the other from losses caused to him by the
conduct of the promisor or the conduct of any other
person”
2. The person who promise to save other is called
indemnifier and the person to whom the promise is
made is called indemnity holder. The object of
contract of indemnity is to protect the indemnity
holder from future (anticipated )losses.
Right of indemnity Holders
1) Collect the damages
2) Collect the full cost
3) Collect all sum
4) Suit for specific performance.
3. Contract of Guarantee
According to section 126 of contract Act “ a contract of
guarantee is a contract to perform the promise or
discharge the liability of a third person in case of his
default”
The contract of guarantee involve three parties, the
principal debtor, creditor and surety. The person how
give the guarantee is called surety, the person in
respect of whose default the guarantee is given is
called the principal debtor and the person to whom
the guarantee is given is called the creditor.
4. Essential features of indemnity
contract
1) Three parties
2) Identity of mind
3) Liability in existence
4) Primary and secondary liability
5) Written or oral
6) Essential elements of contract
7) No misrepresentations or concealment of fact
5. Consideration in Contract of Guarantee
Like every contract of guarantee also should support with
considerations. It may be any or some considerations but it
should not be totally absent. Any thing done or any
promise by surety for the benefit of principal debtor can be
a consideration. But past consideration is not a
consideration for contract of guarantee.
The person who enter in to contract of guarantee should
have all legal capacity to enter in to contract. He
should not be a minor, person with unsound mind or
person disqualified from contracting .
6. Contract of Bailment
Sec 148 of contract Act “ Bailment is the delivery of
goods to another for some purpose, upon a contract
that they shall, when the purpose is accomplished be
return or dispose of according to the perosn delivering
them”
The person who deliver the goods are called bailer the
person to whom the goods are delivered are called
bailee.
7. Duties of Bailee
1) To take reasonable care of the goods bailed.
2) Not to mix the bailed goods with his goods.
3) Not to make any unauthorized use
4) Not to set up adverse title
5) To return the goods
6) Retain addition or profit
8. Right of Bailee
1) Right to enforce the duties of bailor
2) Right to reimbursement
3) Right to remuneration
4) Right to compensation
5) right to sue
9. Duties of bailer
1) Duties to disclose known fact
2) Duty to bear extra ordinary expenses of bailment
3) Duty to indemnify the bailee
4)Duty to bear the risk
Right of bailor
5) Entailed to get back the goods
6) Right to claim any increase in the value of goods
7) Right 0f termination
8) Right to enforce the duties of bailee
9) Right to file a suit against third person
10. Contract of Lien
Lien means a right by which a person is entitled to retain
the possession of goods of another until the sum due
to him is paid. The right to possess the goods is called
right of lien.
Particular or special lien : Where the bailee has in
accordance with purpose the bailment rendered any
services involving the exercise of labour or skill on
respect of goods bailed he has in the absence of
contract to the contrary a right to retain such goods
until he receive due remuneration for the service he
has rendered in respect of them.
11. General Lien: Is a right to retain any goods belongs to
other as a security for general balance of account.
For person have general lien power
1) Banker
2) Wharfingers
3) Attorney of high court
4) Policy brokers
12. Pledge Contract
Pledge is a special kind of bailment where a thing is
delivered as security for the repayment of debt.
Bailment of goods as a security for repayment of debt
of performance of a promise is called pledge.
13. Law of Agency
Agent is a person employed to do any act for another or
represent another in dealing with third person.
Legal rule of agency
1) Whatever a person can do can be done through agent
2) The principal should be competent person
3) Any person can be agent
4) No consideration is required for agency.
14. Creation of agency
1) Agency by agreement
2) Agency by implication
3) Agency by estoppel (prevent a person from denying a
fact )
4) Agency by holding out
5) Agency by necessity.
6) Agency by rectification.
15. Termination of agency
1) By the act of parties
a) By agreement
b) By revocation by principal
c) By renunciation of agency.
2) By operation of Law
a) On the completion of business of agency
b) By expiry of time
c) By destruction of subject matter
d) Insolvency of the principal
e) Death or insanity of principal or agent
f) Dissolution of company
g) The principal become alien anemy.
16. Types of agents
1) General agent
2) Special agent
3) Universal agent
4) Commercial agent
a) Auctioneers
b) Brokers
c) Del credere agent
d) Banker
e) Commission agent
5) Non mercantile agent
17. Right of Agents
1) Right to remuneration
2) Right to retain
3) Right to lien
4) Right to compensation
18. Duties of agent
1) Duty to follow directions given
2) Duty to reasonable skill and care
3) Duty to render accounts
4) Duty to communicate in case of difficulties
5) Duty to pay overall money
6) Duty not to setup adverse title
7) Duty to [ass information to principal
8) Duty not to disclose confidential information
9) Duty not make secret profit from agency
