1. CONTRACT OF INDEMNITY

2. CONTRACT OF GUARANTEE

3. CONTRACT OF BAILMENT

4. CONTRACT OF AGENCY

DEFINITIONDEFINITION

S.124 –S.124 – A contract of indemnity is a A contract of indemnity is a contract whereby one party contract whereby one party promises to save the other from loss promises to save the other from loss caused to him by the conduct of the caused to him by the conduct of the promisor himself or by the conduct promisor himself or by the conduct of any other person.of any other person.

PARTIES TO CONTRACTPARTIES TO CONTRACT

1)1) Indemnifier Indemnifier

2)2) Indemnified / Indemnity HolderIndemnified / Indemnity Holder

RIGHT OF INDEMNITY HOLDER RIGHT OF INDEMNITY HOLDER WHEN SUED (S.125)WHEN SUED (S.125)

1)1) All DamagesAll Damages

2)2) All CostsAll Costs

3)3) All SumsAll Sums

FEATURES OF INDEMNITYFEATURES OF INDEMNITY

1)1) It must possess all ingredients of a It must possess all ingredients of a valid agreement.valid agreement.

2)2) It is a contingent agreement to It is a contingent agreement to make good the loss.make good the loss.

3)3) The loss must be caused by human The loss must be caused by human conduct only.conduct only.

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

DEFINITION

S.126 – “A contract to perform the promise or discharge the liability of a third person in case of his default.

STATUTE

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

PARTIES TO CONTRACT

SURETY – The person who gives the guarantee.

PRINCIPAL DEBTOR – The person for whom the guarantee is given.

CREDITOR – The person to whom the guarantee is given.

KINDS OF GUARANTEE

SPECIFIC – It is intended to be applicable to a particular debt and thus comes to an end on its repayment. It is irrevocable

CONTINUING – It extends to a series of transactions. It is revocable regarding future transactions.

RIGHTS OF A CREDITOR

Payment from surety as soon as the principal debtor refuses to pay or makes default in payment.

Where surety is insolvent, creditor is entitled to proceed in the surety’s insolvency & claim the pro-rata dividend.

RIGHTS OF SURETY

AGAINST CREDITOR – In case of fidelity guarantee, surety can direct creditor to dismiss the employee whose honesty he has guaranteed and employee has been proved dishonest.

AGAINST CO-SURETIES – When a debt is guaranteed by more than one person they are called co-sureties. They have a right of contribution’ between them. When a surety has paid more than his share, he has a right of contribution from the other sureties who are equally bound to pay with him. If one of the sureties become insolvent, the solvent co-sureties have to contribute the amount equally.

AGAINST PRINCIPAL DEBTOR –

•RIGHT OF SUBROGATION: Surety is subrogated to all the rights which the creditor had against the principal debtor.

•RIGHT TO BE INDEMNIFIED: Surety has a right to recover from the principal debtor, the amounts which he has rightfully paid under the contract of Guarantee.

DISCHARGE OF SURETY

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

By death of surety

By variance in terms of contract

By release or discharge of principal debtor

By compounding with, or giving time to, or agreeing not to sue principal debtor

By creditors act or omission impairing surety’s eventual remedy.

Loss of security

DEFINITION – S.148

The 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 be disposed off according to the directions of the person delivering them.

PARTIES TO THE CONTRACT

Bailor

Bailee

FEATURES

Delivery of goods

Contract

Return of goods in specie

KINDS OF BAILMENT

Safe Deposit – Depositum Lending – Commodation Hire – Locatio et Conductio Pledge or Pawn – Vadium Reward – Mondatum

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

TERMINATION OF BAILMENT

On expiry of the stipulated period. On the accomplishment of the specified purpose. By bailee’s act inconsistent with conditions. Termination of gratuitous bailment.

DEFINITION – S.182

An agent is a person employed to do an act for another or to represent another in his dealings with third person. The person for whom such act is done or who is so represented is called the principal.

General Agent Special Agent Co-Agent Broker Auctioneer Commission Agent Del-credre Agent

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

DUTIES OF AN AGENT

Right To Remuneration Right Of Lien Right Of Retainer Right To Be Indemnified Right To Be Compensated

Express Agreement

Implied Agreement

By Necessity

By Estoppel

By Holding Out

By Ratification

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

OPERATION OF LAW Completion Of Business of Agency By Efflux of Time Destruction of Subject Matter Death Or Insanity Of Agent Or Principal Insolvency of Principal

CONDITIONS UNDER WHICH AGENCY CANNOT BE TERMINATED

Agency Coupled With Interest – S.202 Authority Partially Exercised – S.203 Express Contract – S.205

THE END !!!