24-04-2012, 03:55 PM
INDEMNITY AND GUARANTEE
INDEMNITY & GUARANTEE.ppt (Size: 68.66 KB / Downloads: 40)
INDEMNITY
A contract by which one party promise to save the other from loss caused to him by the conduct of the promisor or any other person is called a contract of indemnity.
The promisor is called indemnifier.
The promisee is called indemnified.
It is of two types:-
(a) expressed
(b) implied
Essentials of indemnity
It should satisfy Essentials of a valid contract
There must be a promise to save other party from some loss
The loss may be due to any person
It may be expressed / implied
GUARANTEE
A contract of guarantee is a contract to perform the promise/discharge the liability of a third person in case of his default.
The promisor is called surety.
The promisee is called principal debtor.
The third party is called as creditor.
It is of two types:-
(a) expressed
(b) implied
DISCHARGE OF SURETY
By notice.
By death.
By variation in the terms & conditions of original contract.
By discharge of principal debtors.
By compounding by creditor with the principal debtors.
By loosing the security-discharge up to value of security.
By creditors act / omission of any duty towards surety.
By invalidation of the contract.