Special contract - contract of indemnity, Assignments of Contract Law

Download Special contract - contract of indemnity and more Assignments Contract Law in PDF only on Docsity! Page 1 of 4 Unit-1A: Contract of Indemnity Y# Q# Quest 2019/J 1 Define Contract of Indemnity and what are the rights of an indemnity holder? 2019/D 1 Define Contract of Indemnity. State the distinction b/w Contract of Indemnity and Contract of Guarantee The below topic covered for the above questions 1).Contract of Indemnity  General 1.1).Introduction 1.2).Definition 1.3).Interpretation 1.4).Example 1.5).Illustration 1.6).Parties of Indemnity contract 2).Essentials/Features/Nature of indemnity contract 2.1).Valid contract 2.2).Anticipated loss 2.3).To save other party 2.4).Covers only the actual loss 2.5).Depend on good faith 2.6).May be expressed or implied 3). Rights of an indemnity holder (Promisee)  2019/J 3.1).All Damages 3.2).All Costs 3.3).All Sums 4).Rights of Indemnifier (Doctrine of Subrogation) 4.1).Rights when IH acts negligently 4.2).Rights when IH acts with bad intention 4.3).Rights when IH acts against Promisor 4.4).Rights against third party 4.5).Rights for damages (compensation) 5).Case Laws 5.1).Claiming indemnity 5.2).Implied Indemnity 6).Difference between Contract of Indemnity and Contract of Guarantee  2019/D 6.1).Purpose of contract 6.2).Number of Parties 6.3).Number of contracts 6.4).Nature of liability 6.5).Consideration 6.6).Commencement of liability 6.7).Discharge from liability 6.8).Nature of contract 6.9).Right to reimbursement 6.10).Number of promisor 6.11).Scope 7).More about indemnity contract 7.1).Other Names for Indemnity Agreements 7.2).What Businesses Use Indemnity Agreements 7.3).Recovery period of Indemnity contract: Page 2 of 4 1).Contract of Indemnity  General 1.1). Introduction 1).The term Indemnity literally means “Security against loss” 2).Indemnity is compensation paid by one party to another to cover damages, injury or losses 3).Indemnity contract is a contractual agreement b/w 2 parties whereby 1 party agrees to pay for potential losses/damages caused by another party 1.2).Definition As per section 124 of ICA, 1872, [“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”. 1.3).Interpretation 1).A contract, 2).by which, 3).one party promises to save other party from loss caused to him by the contract of the promisor himself, or by the conduct of any other person, 5).is called a “contract of indemnity 1.4).Example: Before moving into a rental property, a landlord might require the tenant to sign an indemnity clause in the lease agreement. This would protect the landlord from any loss or damages that the tenant might cause to the property. 1.5).Illustration: 'A' has indemnity contract with 'B' that if 'C' causes harm to 'B' then 'A' will be compensated to 'B' 1.6. Parties of Indemnity contract 1).Indemnitor/Indemnifier = Gives indemnity (Give compensation) 2).Indemnitee/Indemnified/Indemnity holder = Receives indemnity Example: Assume you are shifting to rental house with indemnity contract. Here, Indemnitee=land owner, receive indemnity, if any harm to his property. Indemnitor= would be you, the tenant. 2. Essentials/Features/Nature of indemnity contract 2.1).Valid contract: The contract must be a valid one As per section 2(h) of ICA 1872, “An agreement enforceable by law is contract” So, Indemnity agreement should be enforceable by law as it is an agreement by default As per section 10 of ICA 1872, [What agreements are contracts] “All agreements are contracts, if they are made by the free consent of the parties, competent to contract, for a lawful consideration, with a lawful object and are not expressly declared by the Act to be void” So, Indemnity contract should satisfy all the elements of basic contract as it is a type of the contract 2.2).Anticipated loss: There must be an anticipation to be lost 2.3).To save other party: The loss must be caused by promisor or any other persons. And there must be a promise to save them from such loss. 2.4).Covers only the actual loss: Enforceable only when loss occur as mentioned in the contract Indemnifier is liable only for the loss mentioned in the contract 2.5).Depend on good faith: This contract depends on good faith 2.6).May be expressed or implied: