special contracts

Special Contracts

Indemnity &Guarantee

Bailment &Pledge

Agency

Sec - 124 Sec - 148 Sec - 182

Indemnity & GuaranteeIndemnity Sec - 124• One person• Makes a Promise• To another person• To save from loss• By doing something• E.G. Insurance Agreement

Parties of indemnity

Indemnifier: Person giving promiseIndemnified: Person receiving promise

Nature of IndemnityIt 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.

Guarantee Sec - 126• One person• 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

Specific Guarantee: For a single transaction.

Continuing 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 - 126Creditor

person for whose default guarantee is given sec 126.

Debtor

“is person who gives the guarantee” [section 126].Surety

Rights Of Sureties

AgainstDebtor

Subrogation – sec 140Indemnity – sec 145.

Againstcreditor

Claim securitySetoff

Againstco-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.

Bailment

Bailment is • 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 :