12

Indemnity and Guarantee

CHAPTER OBJECTIVES

After carefully reading this chapter, you will be able:

  • To understand the meaning of contracts of Indemnity and contracts of guarantee.
  • To get a clear idea about the rights of Indemnity holder.
  • To distinguish between a contract of indemnity and a contract of guarantee.
  • To form an idea about the essential elements of a contract of guarantee and kinds of guarantee contracts.
  • To describe the rights and liabilities of the surety and when the surety will be discharged of his liabilities.

Contracts of Indemnity: Sec. 124 of the Indian Contract Act defines a contract of indemnity as, ‘a contract by which one party promises to save the other from the loss caused to him by the conduct of the promisor himself ...

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