CH-8

INDEMNITY 124-125 GUARANTEE 126-147

DEFINITION 124 126

A contract by which one A contract to perform the promise, or discharge
party promises to save the the liability, of a third person in case of his
other from loss caused to default. The person who gives the guarantee is
him by the conduct of the called the "surety"; the person in respect of
promisor himself, or by the whose default the guarantee is given is called the
conduct of any other "principal debtor", and the person to whom the
person, guarantee is given is called the "creditor". A
guarantee may be either oral or written.

RIGHTS ➢ ALL DAMAGES SURETY KI AGAINST

➢ ALL COSTS ➢ PRINCIPLE DEBTOR
➢ ALL SUM ➢ CREDITOR
➢ CO-SURETIES

DISCHARGE *NOT DISCHARGE

NDURCA 3FI
 CH-9 CH-10

BAILMENT PLEDGE AGENCY

148-171+ 180,181 172-179 182-238

DEFINITION the delivery of goods by The bailment of goods as An "agent" is a person

one person to another for security for payment of a employed to do any act
some purpose, upon a debt or performance of a for another, or to
contract that they shall, promise is called represent another in
when the purpose is "pledge". The bailor is in dealings with third
accomplished, be returned this case called the persons. The person for
or otherwise disposed of "pawnor". The bailee is whom such act is done,
according to the called the "pawnee". or who is so represented,
directions of the person is called the "principal".
delivering them. The
person delivering the
goods is called the
"bailor". The person to
whom they are delivered
is called, the "bailee".

1
ELEMENTS DELIVERY #DELIVERY OF GOODS #EMPLOYED TO DO ACT FOR
❖ PURPOSE #TRANSFER OF POSSESSION ANOTHER OR
❖ CONTRACT #PURPOSE OF PLEDGE #REPRESENT ANOTHER
❖ POSSESSION

DUTIES OF
BAILEE/PAWNEE/AGENT
CUMRIT LEST DDSACAS
RIGHT

SRLIC
DUTIES OF
DIE 177-RIGHT OF
BAILOR/PAWNOR/PRINCIP REDEMPTION
LE

TERMINATION
AGIE CURDIR
WHO CAN & HOW CAN #MERCHANTILE AGENT
ANRO
#PARTICULAR LIEN #PERSON IN POSSESSION KINDS
UNDER VOIDABLE #AUCTIONEERS
#GENERAL LIEN CONTRACT #FATCORS
BANKERS #PERSON WITH LIMITED #BROKERS

2
 FACTORS INTEREST #DEL CEDRE
WHARFINGERS BY SELLER IN
ATTORNEY POSSESSION AFTER SELL
POLICY BROKER #BY BUYER AFTER
SALE(BEFORE BUYER
BECOME OWNER)

168:Right of finder of goods.

The finder of goods has no right to sue the owner for compensation for trouble and expense voluntarily incurred
by him to preserve the goods and to find out the owner; but he may retain the goods against the owner until he
receives such compensation; and, where the owner has offered a specific reward for the return of goods lost, the
finder may sue for such reward, and may retain the goods until he receives it.

169:When finder of thing commonly on sale may sell it.

When a thing which is commonly the subject of sale is lost, if the owner cannot with reasonable diligence be
found, or if he refuses, upon demand, to pay the lawful charges of the finder, the finder may sell it—
(1) when the thing is in danger of perishing or of losing the greater part of its value, or,
(2) when the lawful charges of the finder, in respect of the thing found, amount to two-thirds of its value.

IMPORTANT CASE LAW

3
❖ LAKSHMAN SHUKLA VS GAURI DUTT :
A proposal cannot be accepted unless it comes to the knowledge of the person accepting it.

❖ Carlill v Carbolic Smoke Ball Company:

The court observed the following points with regard to general offers:
● Offer can be made to the world at large and contract is made with the person who comes forward
and accept the offer.
● In such cases, communication of acceptance is not necessary. performance of conditions is a
sufficient acceptance without communication
● General offer is continuing in nature and it is open for acceptance to any number of persons until
it is retracted

SECTION 30 WAGERING CONTRACT:

Following are the essentials of the wagering contract:
● event must be uncertain
● mutual CHANCE of Gain or loss or both the parties
● neither party should have any interest except winning or losing
● neither party should have any control over the happening or non happening of the event
❖ HYDE vs WRENCH:
Counteroffer puts an end to the original offer

4
❖ Powell vs Lee:
Communication must be received from the authorized person only. it should be communicated by the
person who has authority to accept. communication from an authorized person is no communication in
the eyes of law.

❖ BhagwanDas versus GirdhariLal and Co:

In cases where contracts are concluded by postal Communications the place of contract is where the
Letter of acceptance is dispatched. in case of instantaneous Communications the place of contract is
where the acceptance is heard.
❖ MOHIRI bIBEE VS DHARMODAS GHOSE:
Indian Contract Act does not t specifically lays down the fate of agreement if it has been entered into
by a minor. However, it was authoritatively settled that minor's agreement is absolutely void. A minor
cannot make a promise enforceable by law.
Indian law with respect to restitution is slightly different from English law. The court held that minor
is not liable under Section 64 and 65 of Contract Act to repay any money or compensate for any
benefit.
❖ KHAN GUL VS LAKHA SINGH:
There can be no estoppel against the minor even if he has acted fraudulently and misrepresented his
age. Minor is not stopped from setting up the defence of minority. The reason behind this is that there

5
 can be no estoppels against the law. The court held that minor cannot be held liable under the
agreement on the basis of estoppel.

The court held that doctrine of restitution finds place in Section 41 of Specific Relief Act (Section 33 of
new Act). False representation by minor about his age gives rise to equitable liability. Court held that
grant of restitution is not enforcement of contract but restoration of state of affairs as they existed
before the formation of contract.
❖ HADLEY VS BAXENDALE:
When two parties have made a contract which one of them has broken, the damages which the other
party ought to receive in respect of such breach of contract should be such as may fairly and
reasonably be considered either arising naturally from the usual course of things or such as may
reasonably be supposed to have been in the contemplation of the parties at the time they made the
contract.
❖ MAULA BUX VS UNION OF INDIA:
Earnest money is a part of purchase price but security deposit is not. therefore, the rule of feature
applies to earnest money and not to security deposit.
❖ S. 56 SLOWIC
TAYLOR VS CLADWELL: Destruction of subject matter. defendants agreed to let the plaintiffs to use
of the music hall. but before the concert could start the hall was destroyed by fire the court held that
contract was frustrated due to destruction of subject matter

6
 KRELL VS HENRY: Defendant hired a flat for witnessing the coronation procession. the procession was
cancelled due to illness of king. the court held that the real object of the contract as recognised by
both parties failed. the object of contract was was frustrated and the plaintiff was not entitled to
recover the balance rent.

Gujarat bottling Company Limited vs Coca Cola company:

there was an agreement for grant of franchise by Coca Cola Co. to Gujarat Bottling Co. to manufacture
bottle, sell and distribute beverages under the trade mark of Coca Cola Co. The agreement also contained a
stipulation that during the period of agreement Gujarat Bottling Co. would not deal with any other company.
Court held that this negative stipulation was not in restraint of trade on the other hand it was intended to
promote the trade. A stipulation intended for advancement of trade would not be regarded as restraint of
trade.
Chappel v. Cooper :necessaries are the things without which a person cannot reasonably exist in society.
What are necessaries may also depend on the status of person and also his requirements at the time of
actual delivery. Therefore, apart from basic necessities of life like food, clothing and shelter, things like
education, medical expenses and funds for marriage etc. may also amount to necessaries in given situations.