Special Contracts: Indemnity; Guarantee; Bailment and pledge; Agency.

Kinds of Guarantee 

  1. Specific or Simple Guarantee: When a guarantee is given in respect to a single debt or specific transaction is to come to an end when the guarantee debt is paid or the promise is duly performed. It is called a specific or simple guarantee.
  2. Continuing guarantee: Section 129, of the contract Act defines a guarantee which towards to a series of transaction, is called a continuing guarantee, thus, a continuing guarantee is not confined to a single transaction but keeps on moving to several transaction continuously.

Revocation of Guarantee 

Revocation of guarantee means cancellation of guarantee already accrued, it may be noted that the specific guarantee cannot be revoked if the liability has already secured. However a continuing guarantee can be revoked and on the revocation of such a guarantee. The liability of the surely or guarantor comes to an end for the future transaction. The surety continues to be liable for the transactions which have taken place up to the time of revocation. A continuing guarantee may be revoked in any of the following waysA Guarantee may be revoked in any of the following ways-

  1. By notice of revocation.
  2. By death of surely.
  3. By discharge of surely in various circumstances
  4. By novation (Sec.62)
  5. By variance in terms (Sec. 133)
  6. By release/discharge of principal Debtor (Sec.-134)
  7. When the creditor events in to an agreement with the principal debtors (Sec.13..)
  8. By creditor act or omission impairing surety’s eventual remedy (Sec. 139)
  9. By loss of security “(Sec. 141)
  10. By invalidation of contract (Sec.142,143,144)

Bailment

Bailment the world ‘bailment’ is derived from the French world the French world ‘baillier’ which means ‘to deliver Etymologically, it means any kind of handling over’. In legal sense, it involves change of possession of goods from one person to another for some specific purpose.

Definition of Bailment

Sec. 148 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 of according to the directions of the person delivering them”. The person delivering the goods is called the ‘bailor’ and the person the person to whom they are delivered is called the ‘bailee’.

Consideration in a contract of bailment

In a contract of bailment, the consideration is generally in the form money payment either by the bailor or the bailee, as for example, when A gives his bicycle to B for repair, or when A gives his car to B on hire. Such consideration in money form, however, is not necessary to support the promise on the part of the bailee to return to goods. The detrainment suffered by the bailor, in parting with possession of the goods, is a sufficient consideration to support the contract of bailment.

 

bailment_001

1. Agreement

There must be an agreement between the bailor and the bailee.This agreement may be either express or implied.However,a bailment may be implied by law also. For example,bailment between a finder of goods and owner of goods.

2. Delivery of Goods

There must be delivery of goods.It means that the possession of goods must be transferred.In this this connection,The following points may be noted:

i. The delivery must be voluntary,for example the delivery of jewellery by its owner to a thief who shows a revolver,does not create a bailment because the delivery is not voluntary.

ii. Delivery may be actual or constructive.

3. Purpose

The delivery of goods must be for some intented purpose.For example,wrong delivery of goods to Jaipur Golden Roadways instead of Patel Roadways,does not create any bailment.

4. Return of specific Goods

The goods which form the subject matter of a bailment must be returned to the bailor or otherwise disposed off according to the directions of the bailor,after the accomplishment of purpose or after the expiry of period of the bailment.it may be noted that the same goods must be returned in their original form or desired.

Kinds/types of Bailment

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i. On the basis of reward

a) Gratuitous Bailment

It is a contract of bailment where no consideration passes between the bailor and the bailee.

b) Non-gratuitous Bailment

It is a contract of bailment where some consideration passes between the bailor and the bailee.

Difference between Gratuitous bailment and non-gratuitous bailment

gratu_001

ii. On the basis of Benefit

a) Bailment for the exclusive benefit of the bailor

It is a contract of bailment which is executed only for the benefit of the bailor and the bailee does not derive any benefit from it.

b) Bailment for the exclusive benefit of the bailee

It is a contract of bailment which is executed only for the benefit of the bailee and the bailor does not derive any benefit from it.

c) Bailment for the mutual benefit

It is a contract of bailment which is executed for the mutual benefit of bailor and bailee.

Special Contracts: Indemnity; Guarantee; Bailment and pledge; Agency.

14 thoughts on “Special Contracts: Indemnity; Guarantee; Bailment and pledge; Agency.

  1. Amazing notes, covering almost all points of the topics.

    Some points may be further added:-

     DEFINITION OF INDEMNITY AS PER ENGLISH LAW
     INDEMNITY AND INSURANCE
     CLAIM OF LOSS BEFORE PAYMENT
    – Usman Jamal vs. Gopal Purushottam, 1928 ILR, Kolkata
     METHOD OF CREATING INDEMNITY OBLIGATIONS
     SITUATIONS OF TYPES OF INDEMNITY CREATION
     LIABILITY OF INDEMNIFIER
     COMMENCEMENT OF LIABILITY OF INDEMNIFIER
     DOCUMENTS AGREEMENTS OF INDEMNITY

     LIABILITY OF SURETY
     RIGHTS OF SURETY
     POSITION OF MINOR
     LETTER OF CREDIT OR BANK GUARANTEE
     SURETY AS FAVOURED DEBTOR
     Brikmyr vs. Darnell
     CONTINUING GUARANTEE – Durga Priya Choudhary vs. Durga Pada
     EXTENT OF SURETY’S LIABILITY S.128

     FINDER OF GOODS AS BAILEE
     ACTUAL DELIVERY AND CONSTRUCTIVE DELIVERY (Fazal vs. Salamat Rai)
     RIGHT TO DISPOSE OF THE GOODS
     BAILMENT AND HIRE PURCHASE

     PLEDGE BY CERTAIN SPECIFIED PERSONS MENTIONED IN THE INDIAN CONTRACT ACT

     KINDS OF AGENTS AND AGENCIES
     DISTINGUISHEMENT BETWEEN AGENT AND SERVANT
     LIABILITY OF PRINCIPAL FOR AGENT’S MISCONDUCT AND TORT
     LIABILITY OF PRINCIPAL AND AGENT BEFORE AND AFTER TERMINATION

    *Over all the notes are superb…….!!!

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