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INDIAN CONTRACT ACT-1872:

INDIAN CONTRACT ACT-1872 JRE SCHOOL OF MANAGEMENT

PowerPoint Presentation:

Haretown and Tortoiseville are 48 miles apart. A hare travels at 10 miles per hour from Haretown to Tortoiseville, while a tortoise travels at 2 miles per hour from Tortoiseville to Haretown. If both set out at the same time, how many miles will the hare have to travel before meeting the tortoise en route?

INDIAN CONTRACT ACT - 1872:

INDIAN CONTRACT ACT - 1872 Enforced w.e.f. September 1, 1872 Applicable to whole of INDIA except J&K Concerned with rights in PERSONAM As distinguished from rights in REM

PowerPoint Presentation:

A CONTRACT is an agreement creating and defining obligations between the parties “ an agreement between two or more persons which is intended to be enforceable at law & is constituted by the acceptance by one party of an offer made to him by the other party to do or to abstain from doing some act .” WHAT IS IT?

COMPONENTS OF CONTRACT:

COMPONENTS OF CONTRACT An Agreement It involves proposal or offer by one party and acceptance of the same by the other party. AGREEMENT = OFFER + ACCEPTANCE Enforceable at law An agreement to become a contract must give rise to legal obligations. It must create legal relations and not merely social or domestic relations. CONTRACT = AGREEMENT+ENFORCEABILITY AT LAW Leading Case: Mrs. Gupta Vs. Mr. Gupta

ELEMENTS OF A VALID CONTRACT:

ELEMENTS OF A VALID CONTRACT 1. Offer and acceptance 2. Intention to create legal relationship 3. Lawful consideration –QUID PRO-QUO 4. Capacity of parties Minor Persons of unsound mind Persons disqualified by law to which they are subject 5. Free consent Coercion Undue Influence Fraud Misrepresentation Mistake

Elements of a valid contract:

Elements of a valid contract 6. Lawful object if forbidden by law of such nature that if permitted it would defeat the provisions of any law fraudulent involves injury to person or property Court regards it immoral or opposed to public policy 7. Certainty of meaning 8. Possibility of performance 9. Not declared to be void or illegal 10. Legal formalities

PowerPoint Presentation:

ENFORCEABILITY PERFORMANCE FORMATION

PowerPoint Presentation:

Valid contract - If all the condition are fulfilled it is called as a valid contract. Contingent contract - In a contract to do or not to do something, if an event is collateral, does or doesn't happen. Express contract - When contracts are either in writing or in oral. Implied contract - When contracts are neither in writing nor in oral. Absolute contract - A contract which is not dependent on fulfillment of any condition.

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INVALID CONTRACTS Void contract Is void(Void - ab - initio) Becomes void Voidable contract Illegal contract Unenforceable contract

PowerPoint Presentation:

Invalid contract - In a contact if any one condition is not fulfilled. Is void (Void-ab-initio) - An agreement which is not valid from the beginning Becomes void - An agreement which is valid in the beginning but due to some supervening impossibility the contract becomes void.

PowerPoint Presentation:

Unenforceable contract - It is valid but due to some technical defect the contract becomes void. In case defects are removed the contract is enforceable.(lack of registration, lack of signature etc.,) Illegal contract - An agreement forbidden by law Voidable contract - A contract which is valid unless until avoided by either the party.

PowerPoint Presentation:

Man Wrinkle spent one-fourth of his life as a boy, one-eighth as a youth, and one-half as an active man. If Man Wrinkle spent 10 years as an old man, then how many years did he spend as an active man?

OFFER:

OFFER when a person made a proposal, when he signifies to another his willingness to do or to abstain from doing something By words By any act ( Positive ) Implied offer By any omission ( Negative )

TYPES OF OFFER:

TYPES OF OFFER Express offer Implied offer Specific offer General offer Cross offer Counter offer Standing offer

PowerPoint Presentation:

Express offer - When offer is given to another person either in writing or in oral. Implied offer - When offer is given to another person neither in writing nor in oral. Specific offer - When offer is given to a specific person. General offer - When offer is given to entire world at a large

PowerPoint Presentation:

Cross offer - When both the persons are making identical offers to each other in ignorance of other’s offer. Counter offer - When both the persons are making offers to each other which are not identical in ignorance of other’s offer. Standing offer - An offer which remains continuously enforceable for a certain period of time.

VALID OFFER:

VALID OFFER Offer must be made with an intention of getting its acceptance Offer must be communicated to offeree ( award announcement) Offer must be given with an intention to create a legal relationship ( becoming son-in-law) The terms of offer must be definite, unambiguous and certain or capable of being made certain ( 100 fans offer)

PowerPoint Presentation:

A offer must be distinguished from (a) a mere declaration of intention (SALE DECLARATION, becoming son-in-law) (b) an invitation to offer ( SHOW ROOM) A offer must not contain a term the non compliance of which may be assumed to amount to acceptance ( if no reply then acceptance ) A tender is an offer as it is in response to an invitation to offer Two identical cross offer do not make a contract VALID OFFER

PowerPoint Presentation:

Termination of offer After expiry of stipulated time when offeree makes counter offer with the death of stipulated time when it is rejected by the offeree When it revoked by the by the offerer When the condition of a conditional offer is not accepted it terminates when acceptance is not in prescribed mode

ACCEPTANCE:

ACCEPTANCE when a person made a proposal to another to whom proposal is made, if proposal is assented there to, it is called acceptance

PowerPoint Presentation:

Must be communicated Must be given to specific person (offerer) Must be in response to an offer Must be absolute and unconditional/unqualified Must be given as per the mode prescribed by the offerer Must be given before the lapse of time or within reasonable time May be given by any person in case of general offer VALID ACCEPTANCE

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May be given by specific person in case of specific offer Mental acceptance is no acceptance or acceptance must not be derived from silence Valid ACCEPTANCE

PowerPoint Presentation:

Revocation of an offer and Acceptance A Offer to sell his property to B through letter , B shows his acceptance through letter A can revoked his offer before B post letter of acceptance B can revoked his acceptance before A receives the letter of acceptance

Consideration is defined as “when at the desire of the promisor or promisee or any other person has done or abstained from doing or does or abstains from doing ,or promises to do or to abstain from doing , something , such an act or abstinence or promise is called a consideration for the promise .:

Consideration is defined as “when at the desire of the promisor or promisee or any other person has done or abstained from doing or does or abstains from doing ,or promises to do or to abstain from doing , something , such an act or abstinence or promise is called a consideration for the promise . CONSIDERATION When a party to an agreement promises to do something he must get “something” in return .This “something” is defined as consideration. A house sold for 10 lacs rupee

No consideration no contract :

No consideration no contract

PowerPoint Presentation:

1)It must move at the desire of the promisor 2)It may move by the promisee or any other person 3)It may be past ,present or future 4)It need not be adequate ( 10 lacs house in 1 lacs , can be voidable) 5)It must be real (magic) and competent ( must not be duty or enforced to party) 6)It must be legal LEGAL RULES AS TO CONSIDERATION

STRANGER TO CONTRACT:

STRANGER TO CONTRACT It is general rule of contract that only parties to contract can sue & be sued on that contract . This rule is known as ‘Doctrine of privity’ i.e relationship between the parties to contract . Stranger to consideration may sue but stranger to contract may not sue . Some Exceptions 1)A trust or beneficiary 2)Marriage settlement , partition or other family arrangements

CONTRACT WITHOUT CONSIDERATION IS VOID – EXCEPTIONS :

CONTRACT WITHOUT CONSIDERATION IS VOID – EXCEPTIONS Under writing or registered case only Love & affection ( promising to pay debt of your family members ) Compensation for voluntary service ( H’ band to wife’s ) Promise to pay a time – barred debt Completed gift ( A FIND B’S PURSE ) AGENCY Charity

Capacity to contract:

Capacity to contract a) Minor b) unsound person c) others i.e alien enemy, insolvent, convicted ( under Conviction)

Minor:

Minor Minor is defined as any person under the age of 18 years . But then , in the following cases a person is said to be minor if he does not complete the age of 21 years a) WHERE a guardian of minor person or property has been appointed under the guardian & wards act ,1890 b) WHERE the superintendence of minor’s property is assumed by a court of wards

Rules governing minors agreement:

Rules governing minors agreement Rule 1 : judges are counselors jury is the servant law is the guardian Rule 2: in case minor entered into a contract which is unlawful , illegal , immoral he is also prosecutable & punishable under the relevant law

Legal rules :

Legal rules An agreement with or by a minor is void ab initio Minor can be promisee or beneficiary Minor cannot ratify his agreement on attaining the age of majority Minor can always take the plea of being a minor even when he is falsely represent himself to be of full age A minor can not become a partner in any Partnership Firm . He may, however , be admitted to the benefits of an already existing partnership

PowerPoint Presentation:

A Minor can not be asked to refund any benefit received under a void agreement The estate of minor is liable to a person who supplies the necessaries of life to him The guardians and parents of minor are not liable to the creditor(s) of minor, for any any breach of contract by minor , even for the supply of the necessaries or otherwise The minor can act as an agent, and bind the principal , but not himself Legal rules

Persons of unsound mind:

Persons of unsound mind 1)Lunatic , 2)Idiots , 3)Drunken or intoxicated persons .

Unsound person :

Unsound person A person generally sound , occasionally unsound can enter into a contract when he of sound mind A person generally unsound occasionally sound can enter onto contract when he is sound mind

FREE CONSENT:

FREE CONSENT “consent is said to be free when it is not caused by: 1.Coercion 2.Undue influence 3.Fraud 4.Misrepresentation 5.Mistake

COERCION:

COERCION Coercion means “ Committing or threaten The threat amounting to coercion need not necessarily be from a party to contract , it may also proceed from a stranger to the contract

PowerPoint Presentation:

Suicide note is also an coercion In this case the wife threatened her husband that she would suicide if he doesn’t transfer hir property in her brother’s favour . The h’band executed the release of the deed under the threat . Held the threat of suicide amounted to coercion within Sec 15 and the release deed was therefore voidable.

UNDUE INFLUENCE A contract is said to be induced by “undue influence” where the relations subsisting between the parties are such that one of the parties are in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other:

UNDUE INFLUENCE A contract is said to be induced by “undue influence” where the relations subsisting between the parties are such that one of the parties are in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other

There is an undue influence between the following persons: - Principal and agent - Superior and subordinate - Doctor and patient - Father and son - Teacher and student - Promoter and company - Master servant - Spiritual advisor and devotee :

There is an undue influence between the following persons: - Principal and agent - Superior and subordinate - Doctor and patient - Father and son - Teacher and student - Promoter and company - Master servant - Spiritual advisor and devotee

Among the following relations there is no undue influence 1. Wife and husband 2. landlord and tenant 3. Debtor and creditor Exception : Raniannapurna vs. Swaminathan A poor Hindu widow was persuaded by a money lender to agree to pay 100% rate of interest on money lent by him. She needed the money to establish her right to maintenance. it was a clear case of undue influence and the court reduced the rate of interest to 24%:

Among the following relations there is no undue influence 1. Wife and husband 2. landlord and tenant 3. Debtor and creditor Exception : Raniannapurna vs. Swaminathan A poor Hindu widow was persuaded by a money lender to agree to pay 100% rate of interest on money lent by him. She needed the money to establish her right to maintenance. it was a clear case of undue influence and the court reduced the rate of interest to 24%

FRAUD:

FRAUD 1. The suggestion that a fact is true when it is not true and the person making it does not believe in itto be true 2. The active concealment of a fact by a person having knowledge or belief of the fact 3. A promise made without any intention of performing it 4. Any such act or omission as the law specially declares to be fraudulent

MISREPRESENTATION:

MISREPRESENTATION When a person positively asserts a fact is true when his information does not warrant it to be so, though he believes it to be true

Babul vs. R. A. Singh:

Babul vs. R. A. Singh M was a marriage broker who gave Y the photograph of a man and told him that the man was young and rich. Y conveyed the same to his daughter who agreed for the proposal. But on the day of marriage it was discovered that the man was the age of 60. There is fraud between M and Y. whereas the is misrepresentation between Y and his daughter.

PowerPoint Presentation:

QUASI CONTRACTS Quasi contracts are result of an agreement enforceable by law. Which are not founded on actual promises, these are contract created by the circumstances where one person has done something for another and the other person enjoyed the benefit of the same. Though no contractual relation exists between the parties, law makes out a contract for them and such contracts is called quasi contracts.

TYPES OF QUASI CONTRACTS:

TYPES OF QUASI CONTRACTS Supply of necessaries Payment by a interested person Obligation to pay for non gratuitous acts Responsibility of finder of goods Mistake or Coercion

SUPPLY OF NECESSARIES :

SUPPLY OF NECESSARIES A minor is liable to pay out of his property for ‘necessaries’ supplied to him or to anyone whom he is legally bound to support. The minor is not personally liable and ‘necessaries’ include food, clothing as well as education, They also include watch bicycle etc.

PAYMENT BY A INTERESTED PERSON :

PAYMENT BY A INTERESTED PERSON A person who is interested in the payment of money which another is bound by law to pay, and who therefore pays it, is entitled to be reimbursed by the other.

OBLIGATION TO PAY FOR NON GRATUITOUS ACTS:

OBLIGATION TO PAY FOR NON GRATUITOUS ACTS when a person lawfully does or delivers anything for the other ,not intending to do so gratuitously, and the person derives any benefit from it, he is liable to compensate, or restore the thing so done or delivered.

RESPONSIBILITY OF THE FINDER OF GOODS:

RESPONSIBILITY OF THE FINDER OF GOODS A person who finds goods belonging to another and takes them into his custody is subject to the responsibility to take care of the goods as a man of ordinary prudence would, In addition to that he must make efforts to trace the owner. If he does not ,he will be guilty of wrong conversation, and till the owner is found out the property will vest with the finder, he can sell in case of [1] goods are or perishable nature [2] owner cannot be found out [3] when owner refuses to pay for the lawful charges [4] when the lawful charges amount to two thirds of thing

Contingent Contract:

Contingent Contract A contingent contract is a contract to do or not to do something, if some event, collateral to such contract, does or does not happen. It is also called a conditional contract. Wagering and Contingent difference Collateral and winner or looser

Example::

Example: A contracts to pay B Rs.10,000 if B’s house is burnt. This is a contingent contract.

Essential Elements:

Essential Elements The performance of a contingent contract is made dependent upon the happening or non-happening of some event The event on which the performance is made to depend, is an event collateral to the contract, i.e., it does not form part of the reciprocal promises which constitute the contract The contingent event should not be the mere will of the promisor (Ex: A promises to pay B Rs. 1,000, if he so chooses, it is not a contingent contract)

Rules Regarding Contingent Contracts:

Rules Regarding Contingent Contracts Contracts contingent upon the happening of a future uncertain event, cannot be enforced by law unless and until that event has happened . And if, the event becomes impossible such contract become void Contracts contingent upon the non-happening of an uncertain future event can be enforced when the happening of that event becomes impossible , and not before

PowerPoint Presentation:

If a contract is contingent upon as to how a person will act at an unspecified time , the event shall be considered to become impossible when such person does anything, which renders it impossible that he should so act within any definite time, or otherwise than under further contingencies ( Marriage case) Contracts contingent upon the happening of a specified uncertain event within a fixed time become void if, at the expiration of the time fixed , such event has not happened or if, before the time fixed, such event becomes impossible Rules Regarding Contingent Contracts

Rules Regarding Contingent Contracts :

Rules Regarding Contingent Contracts Contracts contingent upon the non-happening of a specified event within a fixed time may be enforced by law when the time fixed has expired and such event has not happened, or, before the time fixed expired, if it becomes certain that such event will not happen Contingent agreements to do or not to do anything, if an impossible event happens , are void, whether the impossibility of the event is known or not to the parties to the agreement at the time when it is made (Marriage case)

Discharge of Contract:

Discharge of Contract A contract is said to be discharged or terminated when the rights and obligation created by it are extinguished

Modes of discharged:

Modes of discharged Discharge by agreement Discharge by operation Discharge by breach Discharge by performance Discharge by impossibility Discharge by lapse of time

DISCHARGE BY AGREEMENT OR CONSENT:

DISCHARGE BY AGREEMENT OR CONSENT NOVATION : New contract substituted for old contract with the same or different parties RESCISSION : When some or all terms of a contract are cancelled ALTERATION : When one or more terms of a contract is/are altered by the mutual consent of the parties to the contract REMISSION : Acceptance of a lesser fulfilment of the promise made WAIVER : Mutual abandonment of the right by the parties to contract MERGER : When an inferior right accruing to a party to contract merges into a superior right accruing to the same party ( Purchase of leased Property)

DISCHARGE BY OPERATION OF LAW:

DISCHARGE BY OPERATION OF LAW MERGER INSOLVENCY DEATH UNAUTHORISED ALTERATION OF THE TERMS OF A WRITTEN AGREEMENT RIGHTS & LIABILITIES VESTING IN THE SAME PERSON

Discharge by performance :

Discharge by performance On performance of the obligation undertaken by the parties, the contract is automatically discharged

DISCHARGE BY PERFORMANCE:

DISCHARGE BY PERFORMANCE ACTUAL PERFORMANCE When both parties perform their promises & there is nothing remaining to perform ATTEMPTED PERFORMANCE When the promisor offers to perform his obligation ,but promisee refuses to accept the performance. It is also known as tender

Discharge by impossibility :

Discharge by impossibility Impossibility of performance results in the discharge of contract Example : A promise that he will grow a mango tree in one hour in B’s garden by invoking some mantras is void. The impossibility must be existing from inception of contract. If the impossibility is only known to the promisor then he is bound to compensate the Promisee

Doctrine of frustration :

Doctrine of frustration Frustration means the discharge of contract rendered impossible of performance by external causes beyond the contemplation of parties. The following three condition must be satisfied: The act should have become impossible The impossibility should not self induced by the promisor The reason of impossibility can not be prevented by the promisor

DISCHARGE BY LAPSE OF TIME :

DISCHARGE BY LAPSE OF TIME A contract should be performed within a specified time called period of limitation If it is not performed and if the promisee takes no action within the limitation time, then he is deprived of his remedy at law

DISCHARGE BY BREACH OF CONTRACT:

DISCHARGE BY BREACH OF CONTRACT ACTUAL BREACH : At the time of performance During the performance ANTICIPATORY BREACH By the act of promisor (implied repudiation) By renunciation of obligation (express repudiation)

Discharge by breach :

Discharge by breach ACTUAL BREACH: when a person does not perform his part of contract at the time when it is due, he will liable for its breach. ( A agrees to deliver 20 chairs to B on 1 st may and fails to do so on that day, there is breach of contract by A ) (b) Where a party performs his part of obligation but other party is not satisfied with the performance.

Anticipatory breach of contract :

Anticipatory breach of contract A refusal of Promisor to perform his part of contract, before the due date of performance is known as anticipatory breach of contract.

REMEDIES OF INJURED PARTY:

REMEDIES OF INJURED PARTY A remedy is a means given by law for the enforcement of a right [1] Rescission of damages [2] Suit upon quantum merit [3] Suit for specific performance [4] Suit for injunction

RESCISSION:

RESCISSION When a contract is broken by one party, the other party may sue to treat the contract as rescinded and refuse further performance. In such a case, he is absolved of all his obligations under the contract. The court may give rescission due to 1)contract is voidable 2)contract is unlawful The court may refuse to rescind if 1)Plaintiff has ratified the contract 2)Parties cannot be restored to the original position 3)The third party has acquired for value 4)When only a part is sought to be rescinded.

DAMAGES:

DAMAGES Damages are a monetary compensation allowed to the injured party by the court for the loss or injury suffered by him by the breech of the contract. The objective of awarding damages for the breech of contract is to put the injured party in the same position as if he had not been injured. This is called the doctrine of restitution . The fundamental basis is awarding damages for the pecuniary loss.

QUANTUM MERUIT:

QUANTUM MERUIT The phrase quantum meruit literally means ‘as much as earned’ A right to sue on a quantum meruit arises when a contract, partly performed by one party, has been discharged by breach of contract by the other party This right is performed not on original contract but on implied promise by other party for what has been done

SPECIFIC PERFORMANCE:

SPECIFIC PERFORMANCE In certain cases of breach of contract damages are not an adequate remedy. The court may, in such cases, direct the party in breach to carry out his promise according to terms of the contract. This is a direction by the court for specific performance of the contract at the suit of the party not in breach Cases for specific performance to be enforced 1)when the act agreed to be done is such that compensation is not adequate relief. 2)when there is no standard for ascertaining the actual damage 3)when it is probable that compensation cannot be agreed to be done.

INJUNCTION:

INJUNCTION When a party is in breech of a negative term of contract the court may, by issuing an order, restrain him by doing what he promised him not to do. Such an order of the court is called injunction Court refuses grant of injunction [1] whereby a promisor undertakes not to do something [2] which is negative in substance though not in form

AGENT:

AGENT An agent as a person employed to do any act for another , or to represent another in dealings with third persons the person for whom such act is done is s called the principal

ESSENTIALS OF AGENCY:

ESSENTIALS OF AGENCY Agreement between principal & agent Intention of agent to act on behalf of the principal Anyone can be an agent Anyone can employ an agent

CREATION OF AGENCY:

CREATION OF AGENCY BY EXPRESS AGREEMENT BY IMPLIED AGREEMENT AGENCY BY RATIFICATION Agency by Estoppel

ESSENTIAL OF VALID RATIFICATION:

ESSENTIAL OF VALID RATIFICATION Agent must act as an agent for his principal Principal must be in existence at the time of contract Ratification must be with full knowledge of facts Ratification should be done within a reasonable time of the performance of the act The act to be ratified should be of lawful nature

PowerPoint Presentation:

The ratification can be done only to the whole transaction & not any part of it Ratification should be communicated with the party to contract Ratification should not cause any damages to a third party Ratification can only be of acts which principal had the right to do ESSENTIAL OF VALID RATIFICATION

SUB-AGENT & SUBSTITUTED AGENT:

SUB-AGENT & SUBSTITUTED AGENT A sub agent is a person employed & acting under the control of the agent in the business of the agency A substituted agent is a person named by the agent, on an express or implied authority from the principal, to act for the principal

DIFFERENCES:

DIFFERENCES SUB-AGENT He works under the agent There is no contact between the agent & the principal Agent is wholly & solely responsible for the acts of the sub-agent SUBSTITUTE AGENT He works under the principal There is a contract between him & the principal Agent is in no way responsible for the acts of the substituted agent

Termination of agency:

Termination of agency By act of parties Agreement Revocation by the principal Revocation by the agent By operation of law Performance of the contract Expiry of time Death of either party Insanity of either party Insolvency of either party Destruction of the subject matter Principal becoming an alien enemy Dissolution of a company Termination of sub-agents authority

INDEMNITY: protection against future loss :

INDEMNITY: protection against future loss A contract by which one party promises to protect the other from loss, caused to him by the conduct of the promisor himself , or by the conduct of any other person is called a contract of indemnity Indemnifier ( Promiser): the person who promise to indemnify Indemnity Holder ( Promisee): ther person who loss to be indemnified Example: Motor vehicle insurance, Fire insurance and Marine insurance

ESSENTIAL FEATURES OF INDEMNITY:

ESSENTIAL FEATURES OF INDEMNITY There are two persons , the indemnifier the indemnified or the indemnity holder There must be loss either by the promisor’s conduct or by any other person’s conduct It is a contingent contract by nature It may be express or implied Indemnifier’s liability commences when the event causing the loss occurs or when the event saving the indemnified from the loss becomes impossible

GUARANTEE :

GUARANTEE A contract of guarantee is a contract to perform the promise, or discharge the liability, of a third person in case of his default. The person who gives the guarantee is known as the ‘surety’ , the person in respect of whom the guarantee is given is known as the ‘principal debtor’ , and the person to whom the guarantee is given is called the ‘ creditor’ . A guarantee may be either oral or written.

Indemnity Guarantee :

Indemnity Guarantee If for example, you enter a contract with a travel agent to book a holiday which includes accommodation there may well be a clause relating to indemnity which states that you will be responsible for the loss caused to that hotel by any damage you may have caused and that you will adequately compensate them. A tour operator enters into a contract with a hotel to provide accommodation as part of a tour there may well be a guarantee clause contained in the contract. If for example the customer refuses to pay when they check out of the accommodation there may well be a clause in the contract stating that if they don’t pay the tour operator will provide the payment to the hotel.

TYPES OF GUARANTEE:

TYPES OF GUARANTEE SPECIFIC GUARANTEE: When a guarantee extends to a single transaction or debt it is known as a specific or simple guarantee CONTINUING GUARANTEE : When a guarantee extends to a series of transactions. It is called continuing guarantee.

ESSENTIAL OF GUARANTEE:

ESSENTIAL OF GUARANTEE Existence of primary debtor Consideration for a contract of guarantee There should be no misrepresentation and no concealment

BAILMENT :

BAILMENT The word Bailment is derived from the French word “ballier” which means “to deliver” . Bailment means delivery of goods by one person to another for some purpose ,upon a contract ,that they shall ,when the purpose is accomplished ,be returned or otherwise disposed of according to the instructions of the person delivering them. The person delivering the goods is called the ‘bailor’ and the person to whom they are delivered is called the ‘ bailee’.

Essentials of bailment:

Essentials of bailment There are two persons namely Bailor and Bailee Bailor means the person delivering the goods, Bailee means the person to whom the goods are delivered Their must be delivery of goods The goods must be in deliverable condition

PowerPoint Presentation:

Only the goods are delivered but not the ownership of goods, their must be purpose. Bailee can use the goods Goods must be returned or disposed off after the purpose is accomplished

Duties of bailor:

Duties of bailor To disclose known faults To bear extraordinary expenses of bailment To indemnify bailee for loss in case of pre mature termination of gratuitous bailment To receive back the goods

Rights of bailor:

Rights of bailor Enforcement of rights ( bailee duties) Right of termination Return of goods lent gratuitously Compensation from a wrong –doer Duties of bailee is the rights of bailor

Rights of bailee:

Rights of bailee Delivery of goods to one of several joint bailor of goods Delivery of goods to bailor without title Right to apply to court to stop delivery Right to action against trespassers. Bailee’ s lien.

PLEDGE :

PLEDGE The bailment of goods as security for payment of a debt or performance of a promise is called “Pledge”. The bailor in this case is called the “pledger” or “pawnor” and the bailee is called the “pledgee” or “pawnee”

RIGHTS AND DUTIES OF PAWNOR AND PAWNEE:

RIGHTS AND DUTIES OF PAWNOR AND PAWNEE Rights of Pawnee: Right of retainer Right of retainer for subsequent advances Right to extraordinary expenses Pawnee’s rights where pawnor makes default

Rights of Pawnor:

Rights of Pawnor Right to get back goods Right to redeem debt Maintenance of the goods