Law+of+Special+Contracts (1)

7/31/2019 Law+of+Special+Contracts (1)

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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 thepromisor himself or by the conduct of any otherperson.


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PARTIES TO CONTRACT

1) Indemnifier2) Indemnified / Indemnity Holder

RIGHT OF INDEMNITY HOLDER WHEN SUED (S.125)

1) All Damages2) All Costs3) All Sums


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FEATURES OF INDEMNITY

1) It must possess all ingredients of a validagreement.

2) It is a contingent agreement to makegood the loss.3) The loss must be caused by human

conduct only.4) Loss must have actually been suffered.


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DEFINITION

S.126 A contract to perform the

promise or discharge the liability ofa third person in case of his default.


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STATUTE

S.128 of The Indian Contract Act,1872 states that the liability of thesurety is co-extensive with that ofthe principal debtor, unless it isotherwise provided by the contract.


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PARTIES TO CONTRACT

SURETY The person who givesthe guarantee.

PRINCIPAL DEBTOR The personfor whom the guarantee is given.

CREDITOR The person to whomthe guarantee is given.


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KINDS OF GUARANTEE

SPECIFIC It is intended to beapplicable to a particular debt andthus comes to an end on its

repayment. It is irrevocable

CONTINUING It extends to a

series of transactions. It isrevocable regarding futuretransactions.


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RIGHTS OF A CREDITOR

Payment from surety as soon asthe principal debtor refuses to payor makes default in payment.

Where surety is insolvent, creditoris entitled to proceed in the suretys

insolvency & claim the pro-ratadividend.


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RIGHTS OF SURETY

AGAINST CREDITOR In case of fidelityguarantee, surety can direct creditor to dismissthe employee whose honesty he has guaranteedand employee has been proved dishonest.

AGAINST CO-SURETIES When a debt isguaranteed by more than one person they arecalled co-sureties. They have a right ofcontribution between them.When a surety has paid more than his share, hehas a right of contribution from the othersureties who are equally bound to pay with him.If one of the sureties become insolvent, thesolvent co-sureties have to contribute theamount equally.


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AGAINST PRINCIPAL DEBTOR

RIGHT OF SUBROGATION : Surety issubrogated to all the rights which thecreditor had against the principaldebtor.

RIGHT TO BE INDEMNIFIED : Suretyhas a right to recover from the

principal debtor, the amounts whichhe has rightfully paid under thecontract of Guarantee.


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DISCHARGE OF SURETY

The liability of a surety under a contract ofguarantee may at any time be revoked by thesurety, as to the future transactions by noticeto the creditor:

By death of suretyBy variance in terms of contractBy release or discharge of principal debtorBy compounding with, or giving time to, or

agreeing not to sue principal debtorBy creditors act or omission impairing suretyseventual remedy.Loss of security


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DEFINITION S.148

The delivery of goods by one person toanother for some purpose, upon acontract that they shall, when the purposeis accomplished be returned or otherwisebe disposed off according to the directionsof the person delivering them.


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PARTIES TO THE CONTRACTBailorBailee

FEATURESDelivery of goods

ContractReturn of goods in specie


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KINDS OF BAILMENT

Safe Deposit Depositum

Lending Commodation Hire Locatio et ConductioPledge or Pawn VadiumReward Mondatum


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RIGHTS / DUTIES OF BAILOR Disclosure of faultsRepayment of necessary expensesResponsibility for loss

RIGHTS / DUTIES OF BAILEETo take care of goodsNot to make unauthorised use of goodsNot to mix goods bailed

To return goods bailedTo return excess profitsNot to set up an adverse title


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TERMINATION OF BAILMENT

On expiry of the stipulatedperiod.On the accomplishment of the

specified purpose.By bailees act inconsistent with

conditions.Termination of gratuitous

bailment.


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DEFINITION S.182

An agent is a person employed to do anact for another or to represent another in

his dealings with third person. Theperson for whom such act is done or whois so represented is called the principal.


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General Agent Special Agent

Co-Agent Broker Auctioneer Commission Agent Del-credre Agent


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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


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Express Agreement

Implied AgreementBy NecessityBy EstoppelBy Holding OutBy Ratification


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ACT OF THE PARTIES Principal Revoking Agents Authority Agent Renouncing Business of Agency

OPERATION OF LAW

Completion Of Business of AgencyBy Efflux of TimeDestruction of Subject MatterDeath Or Insanity Of Agent Or PrincipalInsolvenc of Princi al


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CONDITIONS UNDER WHICH

AGENCY CANNOT BE TERMINATED

Agency Coupled With Interest S.202

Authority Partially Exercised S.203Express Contract S.205


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