We have seen so far the introduction of an Indian Contract Act. In this article we will see the remaining part of the act 

CONTINGENT CONTRACTS

  • Section 31 of the act talks about the contingent contract which means to do or abstain from doing something. Contract of indemnity and contract of insurance falls under this category. In contingent contract promisor undertake to perform the contract which is depended upon happening/non happening of a specific future uncertain event. Which is collateral to the contract. It is also termed as the conditional contract. There are 5 conditions laid down under this category for the contract to be named as quasi contract.

 

QUASI CONTRACTS

  • It happens that in the absence of elements of contract certain situation give rise to the certain obligation which is to be performed by the person. They are known as quasi contracts. As they create same obligations arising out of the regular contract . Thus these contracts based upon the principles of justice, equity and good conscience. It is categorized upon following basis.
  • Necessaries of life supplied to incapable person and his dependents.
  • Person pays the money on behalf of one, who is legally bound to pay.
  • Person enjoying the benefits of non gratituitous act.
  • Person finds goods belongs to other.
  • Person to whom money has been paid or anything delivered by mistake or under coercion.

CONTRACTS OF INDEMNITY AND GUARANTY

  • CONTRACT OF INDEMNITY:- 124 of the contract act lays down the provision related to indemnity. Thus indemnity is a contract where one party promises to save the other party from loss caused to him by the conduct of promiseor himself or any third person. It is typically a contingent contract. The person who stands as indemnity called indemnifier. His obligation arises in terms of contract made between promisor and promisee where promise made breach of contract promise can recover damages from the Indemnifier of the particular promisor.
  • CONTRACT OF GUARRANTEE:- The contract of Guarantee is a contract to perform a promise made or discharge of liability incurred by the third person. Thus the person who stands guarantee called as “Surety” . Sec. 145 of act laid down the provision as to protect the surety for the loss caused to him by the default of promisor and entitles him to recover from principal debtor whatever sum he has paid under the guarantee. The nature of liability by surety is co extensive i.e. same as principal debtor. Guarantee can be Continuing Guarantee where the surety stands till the specific performance of contract. When the performance ceases to exists continuing guarantee also cease to exist. Surety can be discharge as the ways laid down under sec. 133 to 139 of the act. i.e.
  • Upon the variance in the contract without the consent of surety
  • If the principal debtor is discharged by contract, any act or any omission which resulted into the discharge . A contract of guarantee becomes invalid when obtained by misrepresentation , by concealment of material facts, where co –surety does not join , when consideration fails.

BAILMENT AND PLEDGE

  • CONTRACT OF BAIMENT:-

It is a contract where delivery of goods by one person to another for same purpose upon a contract that they shall be returned after the purpose is over or dispose off according to directions of the person delivering them. The person who delivers the goods called as the bailor. To whom the goods are delivered under the contract is called Bailee. Thus Depositing currency note in the bank or Depositing gold ornaments in the Locker is not covered under the contract of bailment. In the Gratituitous  bailment no consideration passes between bailor and bailee and the bailor is not responsible for the damages in respect of faults which were not known to him.

  • CONTRACT OF PLEDGE:-

 Contract of pledge is a specie of a contract of bailment but very basic distinction between pledge and bailment is that All pledges are bailments but all bailments are not the pledges. It is a bailment of goods as security for payment of debt or performance of promise. The person who pledges known as pledger or pawner. The bailee is known as pledge/pawnee. In pledge there is no change in ownership. But in exceptional circumstances Pledgee can sail the pledged property. Pawner has the certain rights as to get back the goods, redeem the goods, take care and preserve the goods, Receive the profit from goods. Like pawner pawnee also has the certain rights as to retain the goods, to receive the extra ordinary expenses,  to sue, to sell the goods. Some non owners may also create valid pledge of goods such as mercantile agents, co owners, persons having the limited interests, person having the possession of goods under the voidable contracts.

CONTRACT OF AGENCY

  • Agency is the contract created between an agent and his principal created by an express implied agreement authorizing an agent by his principal to create contractual relations with the third parties. Person appointed by the principal is called an agent whereas the person who appoints the agent or shoulder him his authority is called as Principal.
  • Any person can be appointed as an agent but the principal must be competent to contract.
  • Agency can be created expressly or impliedly. It is also arise by the subsequent ratification or acceptance of an agent’s act by third person . The agency can be created by the estoppels. The agency which is the result of the principal’s conduct is called as “Agency by holding out”. Agency by necessity comes into existence when certain situation compels person to act as an agent for another without his express authority which can also arise by operation of law.
  • When the agent do not disclose the the existence of his principal and the fact of his being agent of the principal then the principal of such agent is known as undisclosed principal. Whereas the agent discloses his representation to the principal but do not disclose the principal’s name then such a principal is known as unnamed principal.
  • There is another category called as sub agent. He is the person appointed by the original agent in the business of agency under his directions and control being responsible to the principal for acts of a sub agent. Whereas substituted agent / co agent is the person named by the agent expressly or impliedly to act for the principal in the business of agency.
  • Agency can be revocable i.e. terminable by the principal , Or Irrevocable which could not be terminated by the principal.

– Adv. Anjali Zarkar

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