What are the similarities between contract of indemnity and contract of guarantee?

Contracts of guarantee and contracts of indemnity perform similar commercial functions, in providing compensation to the creditor for failure of a third party to perform his obligation. A contract of guarantee always and necessarily involves participation of three parties i.e. creditor, principal-debtor and surety.

What is the difference between a contract of indemnity and guarantee?

The contract of indemnity is the contract where one person compensates for the loss of the other. Contract of guarantee is a contract between three people where the third person intervenes to pay the debt if the debtor is at default in paying back.

What is a contract of indemnity?

A contract by which one party promises to save 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.

What is the difference between indemnity and guarantee explain the legal provisions regarding indemnity & guarantee under the Indian Contract Act 1872 Chapter VIII?

Differences between guarantee and indemnity[v] In indemnity, the contingency present is that of the possibility or risk of suffering loss to which the indemnifier agrees to indemnify; while in guarantee, there is an existing debt or duty whose performance is guaranteed by the surety.

What is difference between pledge and bailment?

A Bailment is a transfer or delivery of movable goods/property from one party/person to another person/party for any specific task or service or promise. On the other hand, Pledge is defined as the delivery of movable asset/goods/property to secure debt/ loan or performance of a contract or promise.

What is the difference between indemnity and guarantee explain the legal provisions regarding indemnity & guarantee under the Indian contract Act 1872 Chapter VIII?

What is a contract of guarantee what are its special features distinguish between a contract of guarantee and a contract of indemnity?

A contract of guarantee involves three parties i.e. creditor, principal debtor and surety. An indemnity is for reimbursement of a loss, while a guarantee is for security of the creditor. In a contract of indemnity the liability of the indemnifier is primary and arises when the contingent event occurs.

What is the purpose of contract of guarantee?

The main function of a contract of guarantee is to secure the payment of the debt taken by the principal debtor. If no such debt exists then there is nothing left for the surety to secure. Hence in cases when the debt is time-barred or void, no liability of the surety arises.

What is meant by contract of Indemnity and contract of guarantee discuss the essential elements with illustrations?

A contract of guarantee always has three parties; they are, the creditor, the principal debtor and the surety; whereas a contract of indemnity has two parties, the indemnifier and the indemnity holder. In a contract of indemnity, there is a single promise or contract; a promise to pay if there is a loss.

What is contract of indemnity What are features of contract of indemnity?

A Contract of Indemnity has two parties. The promisor or indemnifier. The promisee or the indemnified or repayment holder. The promisor or indemnifier: He is the individual who vows to bear the loss. The promisee or the indemnifier or indemnity holder: He is the individual whose loss is covered or who are compensated.

What do you mean by contract of guarantee and indemnity in what circumstances a surety is discharged from his liability?

If the creditor parts with or loses any security given to him at the time of the guarantee, without the consent of the surety, the surety is discharged from liability to the extent of the value of the security. Illustration.

What is the difference between pledge and guarantee?

As nouns the difference between pledge and guaranty is that pledge is a solemn promise to do something while guaranty is (legal) an undertaking to answer for the payment of some debt, or the performance of some contract or duty, of another, in case of the failure of such other to pay or perform; a warranty; a security.