Special Contracts: Indemnity; Guarantee; Bailment And Pledge
In Section 124 of the Indian Contract Act, the term "indemnity" has a very specific meaning. It says that a "contract of indemnity" is a contract in which one party promises to protect the other from a loss brought on by the other party's compliance with the promisor's contract or by another party's actions. Therefore, the loss must be the result of human agency, and the contract seeks to make good on a loss brought on by human agency. A contract of indemnification cannot be used, for instance, to cover the loss of cargo at sea as a result of a storm. Essentials of Indemnity contract: Thus, the main components of the indemnity special contract can be summed up as follows: There must be two parties, namely the promisee or indemnified or indemnity-holder and the promisor or indemnifier. To shield the promisee from the loss, a contract of indemnification is taken into. The loss may have been brought about by the promisor's or another ...