CONTRACT OF

INDEMNITY AND
GUARANTEE
Submitted by ;
Aswathy Augestin
INDEMNITY

protection against possible damage orloss, especiall
y a promise of payment, or the money paid if there
is such damage orloss.

GUARANTEE
A promise that something will be done or
will happen, especially a written promise by
a company to repair or changea product that d
evelop a fault within aperiod of time.
CONTRACT OF INDEMNITY
A contract by which one party promise to
save the other from loss caused to him by
the conduct of the promiser himself,or by
the conduct of any other person is called
a ‘contract of indemnity’(sec 124).

. Indemnifier-promisor
.Indemnified-promisee
EXAMPLE
‘A’ contract to indemnify ‘B’ against the
consequences of any proceeding which ‘C’
may take against B in respect of a certain
sum of rs.200.
A B C person
who
make loss
indemnifier indemnity
holder
IMPORTANT POINT OF
CONTRACT OF INDEMNITY
Definition is not exhaustive
INCLUDE;
.express promises to indemnify
.Cases were the loss caused by thr conduct of the
promisor or by the conduct of any other person.
Not include ;
.implied promises to indemnify
.loss from accident and event not depending
on the conduct of promiser.
CONTRACT OF GUARANTEE
Contract to perform the promise ,or discharge
the liabaility ,of a third person in case of
default.
.surety
.principal debtor
.creditor
EXAMPLE
.‘S’ request ‘c’ to lend rs.500 to ‘p’

.guarantees that if P fails to pay the amount ,he will pay

This is a contract of guarantee;

S C P

SURETY CREDITOR PRINCIPAL DEBTOR

.
FEATURES
.concurrence
.primary liability
.essentials of a valid contract
.writing not necessary