ssr021 padlet Special Contracts padlet.com/20021141056/kmaklex2tSitsppe Special Contracts MEKALA SUSHMA MAR 07,2021 12:28 Contract of Indemnity Reimbursement against financial loss or protect someone from incurring a loss. a) Indemnifier b) Indemnified Pledge, Hypothecation and Mortgage. 1) Pledge is used when the lender (pledgee) takes actual possession of assets (i. certificates, goods ) (2) Hypothecation is used for creating charge against the security of movable assets, but here the possession of the security remains with the borrower itself. (@) Mortgage property which includes land, buildings or anything that is, attached to the earth or permanently fastened to anything attached to the earth is used for creating charge against immovable B Mahinder Singh v Mohanlal and others Issue: ‘This is a defendant's appeal arising out of a suit brought for the recovery of Rs. 387 or such amount as may be found duo to the plaintiffs, Plaintiff 1, Pt. Mohan Lal, is admittedly the owner of the houses in question in Mussoorie, ‘The plaintiff 2, Bhagwan Dass & Co. Ltd,, were appointed agents by plaintiff 1 to lease the houses in the year 1933. The plaintif’ case is that plainti2 appointed the defendants as agents on behalf of plaintiff Ito rent the houses and agreed to pay them ‘commission at the rate of 21/2 per cent, on the amount of rent realized, that the defendants rented the three houses placed under their agency for a total sum of Rs. 2550, that out of the ssaid amount Rs. 2145-10-0 was paid to plaintiff 1 but the balance, Rs, 269-6-0, was still due, that apart from the above mentioned sum the plaintiffs claimed Rs. 17-10-0 which sum the plaintiffs were entitled to by way of remission in respect of the house tax of "Fenloe" from the City Board but the said sum ‘was not recovered owing to the negligence of the defendants. hitpstipadiet com/padlatsemaklex2Sicsppelexporsiprint html ‘The suit was resisted by the defendants on, various grounds. It ‘was pleaded inter alia that there was no privity of contract, between plaintiff 1 and the defendants as the latter were appointed sub-agents by( plaintiff 2 who alone was entitled to site, that the original contract entered into between the parties was modified by another contract under which it was stipulated that-the nominal rental value of the threes houses, ‘would be deemed to be Rs. 1800.. That any sum that the defendants realized over and above that amount would be divided half and half between the plaintiffs and the defendants after deducting a sum of Rs, 250 which would be payable to a. third person through whose exertions the rents of the houses ‘would be raised. Rule: ‘An agent cannot lawfully employ another to perform acts ‘which he has expressly or impliedly undertaken to perform personally unless by the ordinary custom of trade a sub-agent ‘may, or, from the nature of the agency, a sub-agent must, be employed, Conclusion: Whats Bailment ? ntsy021 DUTIES AND RIGHTS OF BAILOR Key Differences Between Indemnity and Guarantee ‘The following are the major differences between indemnity and guarantee: 1. In the contract of indemnity, one party makes a promise to the other that he will compensate for any loss occurred to the other party because of the act of the promisor or any other person. In the contract of guarantee, one party makes @ promise to the other party that he will perform the obligation or pay for the liability, in the case of default by a third party. 2. Indemnity is defined in Section 124 of Indian Contract Act, 1872, while in Section 126, Guarantee is defined. 3, In indemnity, there are two parties, indermnifier and indemnified but in the contract of guarantee, there are three parties ic, debtor, creditor, and surety. 4. The lability of the indemnifier in the contract of indemnity is primary whereas if we talk about guarantee the liability of the surety is secondary because the primary liability is of the debtor. 43. The purpose of the contract of indemnity is to save the other party from suffering loss. However, in the case of a contract of guarantee, the aim is to assure the creditor that cither the contract will be performed, or liability will be discharged. 6.In the contract of indemnity, the liability arises when the contingency occurs while in the contract of guarantee, the liability already exists. hitpstipadiet com/padlatsemaklex2Sicsppelexporsiprint html Special Contracts MEANING ooeery IIS ACONTRACT WHERE ONE PARTY Couananree ONE PARTY PROMISES To DISCHARCE ‘The LIABLITY OF A THRO PERSON PARTIES wo mone esa orenae| + CHTER a 12 PRINCIPAL DEBTOR. 2 nooeNrED Wo 15 SAVED FROM Loss, We) ifference between Indemnity and Guarante by lnc PRO Types of Guarantee On the basis of transaction: 1. Specific Guarantee 2, Continuing Guarantee On the basis of time: 1 Retrospective Guarantee 2. Prospective Guarantee Kinds of Guarantee and Revocation of Continuing Guarantee I Contract Act, 1872 by Ganesh Poojary- Law for All ESSENTIALS OF CONTRACT OF GUARANTEE 41. Concurrence of All the Parties: All the three parties namely, the principal debtor, the creditor and the surety must agree to make such a contract. 2, Liability: In 2 contract of guarantee, lability of the surety is secondary ie, the creditor must first proceed against the 218ssr021 debtor and if the latter does not perform his promise, then only he can proceed against the surety. 3, Existence of a Debt; A contract of guarantee pre-supposes the existence ofa lability, which is enforceable at law. If no such liability exists, there can be no contract of guarantee, ‘Thus, where the debt, which is sought to be guaranteed is. already time barred or void, the surety is not liable, 4, Consideration: There must be consideration between the creditor and the surety so as to make the contract enforceable. The consideration must also be lawful. In a contract of guarantee, the consideration received by the principal debtor is taken to be the sufficient consideration for the surety, “Anything done, or any promise made, for the benefit of the principal debtor may be sufficient consideration to the surety for giving the guarantee"- Sec, 127 of Indian Contract Act, 1872 Thus, any benefit received by the debtor is adequate consideration to bind the surety. But past consideration is no consideration for a contract of guarantee. There must be a fresh consideration moving from the creditor 5, Writing not Necessary: A contract of guarantee may either be oral or written. It may be express or implied from the conduct of parties. Note: A Contract of Guarantee must always be in writing under English Law. 6, Essentials of a Valid Contract; [t must have all the essentials, ofa valid contract such as offer and acceptance, intention to create a legal relationship, capacity to contract, genuine and free consent, lawful object, lawful consideration, certainty and possibility of performance and legal formalities. 7. No Concealment of Facts: The creditor should disclose to the surety the facts that are likely to affect the surety's liability. The guarantee obtained by the concealment of such facts is invalid. Thus, the guarantee is invalid ifthe creditor ‘obtains it by the concealment of material facts, 8, No Misrepresentation: The guarantee should not be obtained by misrepresenting the facts to the surety. Though the contract of guarantee is not a contract of uberrimae fidei ie., of absolute good faith, and thus, does not require complete disclosure of all the material facts by the principal debtor or creditor to the surety before he enters into a contract, But the faets, that are likely to affect the extent of surety’s responsibility, must be truly represented hitpstipadiet com/padlatsemaklex2Sicsppelexporsiprint html Special Contracts Contract of Guarantee A Contract to perform the promise, or discharge the liability, of a third person in case of his default is called Contract of Guarantee, A guarantee may be either oral or written, 1. The person who gives the guarantee is called the Surety 2. The person on whose default the guarantee is given is called the Principal Debtor 3. The person to whom the guarantee is given is called the Creditor. Contract Act uses the word ‘surety’ which is same as, ‘guarantor’ Prima facie, the surety is not undertaking to perform should the principal debtor fail; the surety is undertaking to see that the principal debtor does perform his part of the bargain. CONTRACT OF GUARANTEE B roves [eosiaoe cam nose gamers eeairon SURETY Contract of Guarantee [Indian contract act, 1872] by ne PRO Termination of a Bailment Unauthorized use of goods bailed Expiry of term of bailment Accomplishment of purpose Death of either party Destruction of subject matter assy021 Rights of the bailee To claim damages from the bailor if he has sulfe some loss due to non-disclosure of defects in the goods on the bailor's part. If the goods were bailed for hie, the bailee would be entitled to recover damages from the bailor even if the latter was not aware of the existence of such faults in the goods bailed To claim from the bailor all necessary expenses incurred by him for the purpose of the bailment if the ailment was non-gratuitous. To be indemnified against any loss or damage sustained by him by reason of defective title of the bailor. of the bi Duty to take reasonable care of the goods whilst they are in his Possession Duty not to make any unauthorised use of the goods bailed Duty not to set up jus te Duty not to mix the goods bailed with his own goods Duty to return the goods in accordance with the contract Duty to return any accretion to the goods Duties and Rights of Bailee hitpstipadiet com/padlatsemaklex2Sicsppelexporsiprint html Special Contracts ights of the bailor © Right to enforce bailee's performance © Right to claim damages, © Right to claim compensation against unauthorised use of goods © Right to terminate the contract ight to demand return of goods along with accretion to, ifany Duties of the bailor Duty to disclose faults Duty to repay bailee’s expenses Duty to indemnify the bailee Duty to compensate bailee for breach of warranty Duty to claim back the goods Kinds of Bailment Gratuitous bailment © Bailment for the exclusive benefit of the bailor © Bailment for the exclusive benefit of the baile Non-gratuitous bailment 46ser02t silment Essenti © Contract © Subject matter © Delivery of goods © Delivery may be actual or constructive Is of Bailment No change in ownership Purpose Return of goods A ailment is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the Special Contacts purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them SPECIAL CONTRACTS Bhagvandas Rangildas Vani vs The Secretary Of State For India on 26 January, 1926 Issue: Plaintiff, the contractor came into terms with secretary of the state to cut down a certain number of trees in Taloda range, with restraints being put on cutting of some "Reserved" trees. Ifthe contractor cut those reserved trees, the contract can be rescinded by Conservator of the forest and Divisional forest officer, with a payment of rupees 100 and all the timber, fire ‘wood and other material present in the coupe would belong to the government. The contractor allegedly cut 25 of the reserved trees and his contract was cancelled, As liable by law, he was fined with rupees 100 and all the timber and firewood was seized by the government. This sum, ‘0f 5362 was to be paid in 4 installments, out of which the first ‘one of 2662 was already paid and 2nd instalments’ deadline ‘came after the contract was cancelled. Rule: Guarantee for payments by installments cannot be ‘construed as an instance of continuing guarantee Conclusion: Section 84 does not apply generally to all the ‘consequences of a breach on the part of the plaintiff, but only to a particular penalty provided for a breach of the condition as to the plaintiff performing any duty or act or abstaining. froma particular act, and that we have to determine the ‘compensation to be given to the defendant for non-fulflment of this contract by the plaintiff. The result, therefore, is that ‘we vary the decree of the lower Court by allowing to the plaintiff Rs, 1,331, with interest from the date of the recovery of this amount up to the date of payment at six per cent, in addition to the amount of Rs. 101-2-6 already awarded by the lower Court, Bhagwandas Rangildas v. Secretary Of State For India OK II hitpstipadiet com/padlatsemaklex2Sicsppelexporsiprint html