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1. What is Contract of Indemnity?

A Contract, by which one party promises to save the other from loss caused to him by the conduct of the promisor himself or by the conduct of any other person, is called a Contract of indemnity. Sec 124 of Indian law of contract Example: - A Contract, to indemnify B against the consequences of any proceedings which C may take against B in respect of a certain sum of Rs 2000. This is a contract of indemnity.

2. What is a contract of Guarantee? According to sec 126 as a contract to perform the promise or discharge the liability of a third person in case of his default. The person who gives the guarantee is called the Surety the person for whom the guarantee is given is called the Principal debtor and the person to whom the guarantee is given the called the creditor.

3. Difference between Guarantee and Indemnity: 1. The liability of a promisor is primary and independent in a contract of indemnity. But in the case of contract of contract, the liability is secondary, the primary liability being that of the principal debtor. 2. In case of guarantee, there is an existing debt or obligation, the performance of which is guaranteed by the surety. In the case of indemnity the indemnifier undertakes to indemnity.

3. in a contract of guarantee, after the discharging the debt the surety is entitled to proceed against the principal debtor in his name, while in case of indemnify, the indemnifier cannot proceed against third parties in his own name, unless there be an assignment.

4. What is a continuing Guarantee and how is it revoked? According to section 129 of the Indian contract act defines a continuing guarantee as an against which extends to a series of transaction. Example: A guarantees payment to B, a tea dealer, to the amount of Rs. 10,000 for any tea he may time to time supply to C. B supplies C with tea to above value of Rs 10,000, and C pays B for it. After wards B supplies C with tea to the value of Rs 20,000. C fails to pay the guarantee given by A was a continuing guarantee and he is accordingly liable to B to the extent of Rs 10,000. Continuing Guarantee --- How revoked? A Continuing guarantee may be revoked in two ways: 1. Express Revocation (Sec. 130) 2. Death of Surety (Sec. 131)

5. What is the meaning of Consideration for Guarantee? A contract of guarantee must also be supported be lawful consideration. But however, it is not necessary that something must have been done for the benefit of the guarantor.

Anything done for the benefit of the principal debtor is a sufficient consideration to support the promise of guarantor. According to section 127 of the Indian law of contract lays down that: - Anything done, or any promise made for the benefit of the principal debtor may be a sufficient consideration to the surety for giving the guarantee. Example: B request A to sell and deliver to him goods on credit A agrees to do so, provided C will guarantee the payment of the price of the goods. C promises to guarantee the payment in consideration of As promise to deliver the goods. The is a sufficient consideration for Cs promise.

6. Define Bailment. Also explain the essentials of a contract of bailment. Also state the rights and duties of a Bailor and Bailee. Ans: - According to Section 148 of the Indian contract Act, 1872 defines bailment as 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 disposed or according to the directions of the persons delivering them:. Example:(A) A delivers a watch to B for repairs. (B) A lends his book to B. (C) Delivery of goods to a carrier for the purpose of carrying from one place to another. (D) Leaving car or scooter for service or repairs or at a parking lot. (E) Delivering cloth to tailor for stitching a suit. (F) Leaving luggage at cloakrooms.

(G) Depositing documents of title with the banker as a security against a loan. (H) Hiring car, AC, tent etc.

Essentials of Bailment: From the definition of bailment, the following may be noted as the essentials characteristics of bailment: 1. Delivery of goods: - For the purpose of bailment, there should be delivery of goods for some temporary purpose. Delivery of goods may, however, be actual or constructive. 2. Contract: - in bailment the delivery of goods is upon a contract that, when the purpose is accomplished, they shall be returned. For example: - where a watch is delivered to a watch repairer for repairs, it is agreed that it will be returned after repairs on the receipts of the agreed or reasonable charges. 3. The goods are delivered for some purpose and is agreed that the specific goods shall be returned. Returned of specific goods is an essential characteristic of bailment. This where an equivalent and not the same is agreed to be returned there is no bailment. 4. Only every kind of moveable goods other than money and actionable claim are the subject matter of bailment. 5. In case of bailment ownership is not transferred only it signifies the change of possession of goods from one person to another. 6. The Bailor delivers his goods to the Bailee for some definite purpose.

7. Every bailment pre suppose a condition that the goods bailed would be returned to the Bailor or otherwise they will be disposed of according to the direction of the Bailor, on the accomplishment of the purpose or after the expiry of period of bailment. Kind of Bailment: Bailment broadly is classified into two categories: 1. Gratuitous bailment 2. Non-Gratuitous bailment Duties of Bailor: 1. To disclose known faults in goods. 2. duty to repay baileys expenses 3. duty to indemnify the Bailee 4. duty to compensate Bailee for breach of warranty 5. duty to claim back the goods Rights of the Bailor: 1. Right to enforce baileys performance 2. Right to claim damages 3. Right to claim compensation against unauthorized use of goods 4. Right to terminate the contract 5. Right to demand return goods along with accretion to, if any

Duties of Bailee: 1. Duty to take reasonable care of the goods whilst they are in his possession.

2. Duty to make any unauthorized use of the goods bailed 3. Duty not to mix the goods bailed with his own goods 4. Duty to return the goods in accordance with the contract. 5. Duty to return any accretion to the goods Rights of Bailee: 1. The duties of the Bailor are in fact, if looked from the point of view of Bailee, are baileys rights. Thus, Bailee can Bailor for claiming compensation for damage resulting from non disclosure sure of faults in the gods. (B) For extraordinary expenses. (C) For breach of warranty as to title and the damage resulting there from. 2. Right of Lien: - lien is a right in one person to retain that which is in his possession, belonging to another until some debt or claim is paid. Lien may two types: - (A) General lien (B) Particular lien. 3. Right against wrongful deprivation of or injury to goods: - if a third person wrongfully deprives the Bailor of the use or possession of the goods bailed, or causes them any injury, the Bailee is entitled to use such remedies as the owner might have used in the like case if no bailment had been made, and either the Bailor or the Bailee may bring a suit against a their person for such deprivation or injury.

Finder of Lost Goods: A person who finds an article belonging to another is called the finder of lost goods. In the eyes of the law, the position of a finder of lost goods is exactly that of a Bailee. According to Section 71 says A person who finds goods belonging to another, and takes them into his custody, is subject to the same responsibility as a Bailee, it should be notes that the finder

of goods occupies the position of Bailee only against the true owner since he keeps the goods found in trust only for the real owner. Duties and Rights of finder of lost goods: A finder of goods has the following duties: 1. To exercise reasonable care in preserving the goods found. 2. To find the actual owner and restore the goods to him 3. Not to make any personal use of the goods found 4. Not to mix the goods found with his own goods 5. Not to set up any adverse title to goods found The law confers the following rights on a finder of goods: 1. 2. Retain the goods against the owner until he receives compensation for expenses sue the owner for reward 3. When an article found is commonly the subject of sale the owner cannot with reasonable diligence be found, he can sell the goods. Termination of Bailment:The following circumstances render a contract of bailment terminated: 1. In case of unauthorized use of goods bailed by the Bailee. 2. In the case of expiry of term of bailment 3. Accomplishment of the purpose of bailment 4. Death of either party 5. Destruction of subject matter

What is pledge: -

A pledge or pawn is a kind of bailment. It is the bailment of moveable things as security for the repayment of a debt or performance of a promise. The Bailor in this case is called the Pawnor or Pledgor, while the Bailee is called the Pawnee or Pledgee (Sec 172) In order to enforce a contract of pledge, the property pledged should be actually or constructively delivered to the Pawnee. Ownership of the pledged goods does not pass to the pledge. Pledge and Bailment Compared: The contracts of Pledge and Bailment are similar in two of the following respects: 1. The both the case there is a delivery of movable goods or property 2. The goods are delivered back to the Bailor or Pawnor after accomplishment of purpose or expiry of stipulated time. The two, however, differ in a number of ways such as the following: 1. Purpose: - Pledge has a specific purpose i.e. repayment of a debt or performance of a promise, whereas in case of bailment, there have a general purpose. 2. Use of goods: - The Pawnee has not right to make any use of the goods pledged, on the other hand in the bailment, the Bailee has the right to use the goods if the terms of bailment so provide.

Essentials of Pledge: 1. Delivery essentials. 2. Deliver goods as a security 3. Only moveable goods can be pledged.

Right and Duties of Pawnee: The law confers the following Rights to the Pawnee: 1. Right of Retaining goods: - The Pawnee has a right to retain the goods pledged for: Payment of the debt Performance of the promise All expenses incurred by him in respect of the possession or for the preservation of the goods pledged (Sec 173) 3. Right as to extraordinary expenses: - The Pawnee is entitled to receive from the Pawnor extraordinary expenses incurred by him for the preservation of the goods pledged. Section 175 4. Right to sue when Pawnor makes default 5. Right to sale: - Upon Pawnors default as regards payment of debt or performance of the promise, the Pawnee may sell the goods pledged, on giving the Pawnor reasonable notice of the sale. If the proceed of such sale are less than the amount due in respect of the debt or promise, the Pawnor is still liable to pay the balance. If the proceeds of the sale are greater than the amount so due, the Pawnee shall pay over the surplus to the Pawnor. Section 176 6. Right to have goods title to the goods

Duties of Pawnee: A Pawnee is subject to the following duties: 1. Duty to reasonable care of the goods pledged

2. Duty not to make personal use of the goods pledged 3. Duty not to mix goods pledged with his own goods 4. Duty to return the goods pledged after the debt has been paid or the promise has been performed 5. Duty not to commit any act which is inconsistent with the term of pledge. 6. Duty to deliver accretion if any to the goods pledged.

Right and Duties of the Pawnor: Rights of Pawnor: The owner has a right to get back the goods pledged plus increase thereon if any by him, after paying off the amount of debt in full and other charges (If applicable), or performing the promise. Sec 177 Duties of Pawnor: 1. Duty to repay the debt or perform the promise 2. Duty to disclose the defects in the goods pledged 3. Duty to meet extraordinary expenses