MID TERM EXAM TRIMESTER 2

Date: 08.03.22
Name of the student: Nikhil Babu
PRN: 1182210050
Name of Program: BBALLB
Year: 2021-2026
Trimester: Second
Name of Subject: Law of Contracts II
Subject Code: SOL1011A
1] According to section 128 of Indian Contract Act, 1872, the liability of a surety is co-
extensive with that of principal debtor's unless the contract provides. Liability of surety is
same as that of the principal debtor, speaks about one of the cardinal principles relating to
the contract of guarantee. It states that the liability of the surety is co-extensive with that
of the principal debtor. The surety may, however, by an agreement place a limit upon his
liability
Surety’s liability, the liability of the surety is co-extensive with that of the principal
debtor, unless it is otherwise provided by the contract. The liability of the surety is co-
extensive with that of the principal debtor, unless it is otherwise provided by the
contract." A guarantee to B the payment of a bill of exchange by C, the acceptor. The bill
is dishonored by C. A is liable, not only for the amount of the bill, but also for any
interest and charges which may have become due on it. A guarantee to B the payment of
a bill of exchange by C, the acceptor. The bill is dishonored by C. A is liable, not only for
the amount of the bill, but also for any interest and charges which may have become due
on it." He is liable for the whole amount for which the principal debtor is liable and he is
liable for no more. Where the principal debtor acknowledges liability and this has the
effect of extending the period of limitation against him the surety also becomes affected
by it.
Condition precedent: Where there is a condition precedent to the surety’s liability, he will
not be liable unless that condition is first fulfilled. Section 144 to an extent is based on
this principle: Where a person gives a guarantee upon a contract that creditor shall not act
upon it until another person has joined it as co-surety, the guarantee is not valid if that
other person does not join.
An illustration in point is National Provincial Bank of England v Brackenbury: The
defendant signed a guarantee which was intended to be a joint and several guarantees of
three other persons with him. One of them did not sign. There is no agreement between
the bank and the co-guarantors to dispense with his signature, the defendant was held not
liable.
EXAMPLE: When A requests B to lend `10,000 to C and guarantees that C will repay the
amount within the agreed time and that on C falling to do so, he will himself pay to B,
there is a contract of guarantee. Here, B is the creditor, C the principal debtor and A the
surety.
Case law: Edavan Kavingal Kelappan Nambiar vs Moolakal Kunhi Raman and Anr. on
23 August, 1956

2] Change of possession can happen by physical delivery or by any action which has the
effect of placing the goods in the possession of bailee. The change of possession does not
lead to change of ownership. In bailment, bailor continues to be the owner of goods as
there is no change of ownership.
Bailment as defined in section 148 of the Indian contract act 1872 is the delivery of goods
by one person to another for some specific purpose, upon a contract that these goods are
to be returned when the specific purpose is complete. For example, A delivering his car
for Service at the service center is an example of bailment. The person delivering the
goods is known as bailor and the person to whom goods are delivered is known as bailee.
However, if the owner continues to maintain control over the goods, there is no bailment.
1. The bailor is bound to disclose to the bailee, the faults in the goods bailed. which he
knows and if he does not make such disclosures, he is directly responsible for
damage arising to the bailee directly from such faults.
2. Bailor is also responsible to the bailee for any loss which the bailee may sustain by
reason of the fact that bailor was not entitled to make EXPLAIN
3. Duty to indemnify the bailee: - The bailor is duty bound to make good the loss
4. suffered by the bailee where he was compelled to return the goods before the expiry
of the period of bailment
5. Duty to claim back the goods: - The bailor is bound to accept the goods upon being
returned by the bailee in accordance with the terms of the agreement. If he refuses
to accept it at a proper time, without any reasonable ground then he will be liable
for any loss which may happen to the goods.
Bailee’s Liabilities
Care to be taken by the bailee – (Section 151 and 152)
The bailee is bound to take as much care of goods bailed to him as a man of ordinary
prudence would have under similar circumstances and therefore, he will not be liable for
any loss, destruction or deterioration of the thing bailed if he has taken care.
The duty of the bailee to return the bailed goods (Section 160 and 161)
Bailee is under the duty to return or deliver goods according to the bailor’s direction as
soon as the time for which goods were bailed has expired.
By concluding I would like to say, now after analyzing the provisions of bailment and
pledge in detail we have seen that the concept of bailment involves handing over the goods
to another for a specific purpose whereas in pledge also goods are transferred, but not to
fulfill a specific purpose but also to keep them as a security for repayment of deb t.