Contract - II (Specific Contract And Law of Partnership)


PAPER – IV
CONTRACT - II
(Specific Contract And Law of Partnership)
(Paper Code : K-2004)

The course shall comprise of the following :
1. Contract of Indemnity, Contract of Guarantee, Bailment and Pledge.
2. Contract of Agency.
3. Definition of Sale, Essentials of Contract of Sale and Agreement to Sale, Duties of Sellers and Buyers, Sale by Sample, Sale by Description, Conditions and Warranties, Rule of Caveat Emptor.
4. Transfer of Title, Passing of Property in Goods, Delivery of Goods – Rules regarding Delivery of Goods, Unpaid Seller and his Rights, Remedies for the Breach of Contract.
5. Network of Partnership, Difference between Partnership and a Company, Mutual relationship between Partners, Authority of Partners, Dissolution of Partnership, Minor as Partner, Effect of non-registration of Firm.

BOOKS RECOMMENDED
Anson, Law of Contract.
Bangia R.K. (Dr.), Indian Contract Act.
Desai S.T., The Indian Contract Act.
Kapoor S.K., Contract.
Moitra A.C., (Dr.), Principles and Digest of Indian Contract Act.
Narayena P.S., The Law of Partnership.
Pollock and Mulla, Indian Contract and Specific Relief Act.
Singh Avtar (Dr.), Introduction to Law of Partnership.
Singh Avtar (Dr.), Law of Contract.

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CHAPTER VIII

(Sec: 124) Contract of Indemnity-----[top]

“Contract of indemnity” defined.A contract by which one party promises to save the other from loss caused to him by the contract of the promisor himself, or by the conduct of any other person, is called a “contract of indemnity”.

Indemnity” – to make good the loss / to compensate for the loss

Indemnifier (Promisor) who promise to compensate or indemnify the loss of indemnity holder (Promisee)

INDEMNIFIER (Promisor) ------------à Contract ------------à INDEMNITY HOLDER (Promisee)

Example 1: (General Insurance Company & Customer)

Insurance company offering general insurance to its customer becomes an INDEMNIFIER and the customer whose losses are compensated by the Insurance Company become INDEMNITY- HOLDER

Example 2: (Share Holder & Company)

If in case a share holder losses his shares and approaches the share issued company for issuing duplicate shares of the same which he lost, then the company may ask for a indemnity bond from the share holder against issuance of duplicate shares for the losses the company may face if the share holder might have sold the shares before he demand the duplicate shares, this contract for indemnity bond or receiving indemnity bond from the share holder by the company is a contract of indemnity

Example 3: (Principle & Agent)

In an Agency contract, Agent is acting on behalf of Principle and any loss incurred by the Agent during the legal act as per agency contract will have to be compensated by principle there for Agency contract is an example of implied contract of Indemnity

Indemnity & Guarantee
Acknowledgement of debt by principal debtor binds the guarantor in all respects as if he had given express consent;

CASE: United Commercial Bank Vs. B.M. Mahadev Babu. AIR 1992 Kant 294

Example 4: (Partners from Partnership firm)

In case of Partnership firm, partners are considered as agents to each other as well as principles, any partner acting on behalf of other partners legally as per partnership agreement and if he faces any loss then other partners should compensate of indemnify his losses, and this also considered as a contract of indemnity

EXPRESSED & IMPLIED Contract of Indemnity

General Insurance Contract & Indemnity Bond by Share holders are examples of Expressed contract of Indemnity
Contract of Agency & Partnerships agreements are examples of implied contract of indemnity

ILLEGAL CONTRACT

Compensation promise on Illegal activities cannot be considered as a Contract of Indemnity