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Distinguish between Contract of Indemnity and Contract of
guarantee.
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Answer / puja
CONTRACT OF INDEMNITY
1 There are two parties
to the contract viz.
the indemnifier and the
indemnified
2 The liability of the
indemnifier to the
indemnifed is primary
CONTRACT OF GUARANTEE
1 There are three parties
to the contract viz. the
creditor, the principal
debtor and the surety.
2 The liability of the
surety to the creditor
is collateral or secondary
the primary liability being
that of the principal debtor
| Is This Answer Correct ? | 165 Yes | 20 No |
Answer / ammar ul hassan
Contract of indemnity
1) there are 2 parties indemnifier and indemnity holder..
2)there is 1 contract b\w indemnifier and indemnified..
3)The nature of liability of indemnifier is primary and
independant...
4)in a contract of indemnity, the indemnifier promises
without the request of debtor..
5)A contract of indemnify is for reimbursement..
Contract of Guarantee.........
1)there are 3 parties Creditor, Principal Debtor And Surety..
2)there are 3 contracts B\W creditor and principal,
principal and surety, surety and creditor.
3)Liability of surety is Secondary....
4)contract of Guarantee is for security of a debt or
performance of promise...
| Is This Answer Correct ? | 52 Yes | 9 No |
Answer / avik ghosh
CONTRACT OF INDEMNITY
1)Section 124 of the Indian Contract Act 1872 defines a
"contract of indemnity" as 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.
e.g = 'x' contracts to indemnify 'y' against the
consequences of any legal proceedings which c
may take against B in respect of a certain sum of
Rs.200/=.
2 There are two parties
to the contract viz.
the indemnifier and the
indemnity holder
3 The liability of the
indemnifier is primary
4 In the Contract of indemnity the liability of the
indemnifier arises only on the happening of the contingency.
5 In the contract of indemnity the loss falls on the
indemnifier except in certain special cases.
6 There is only one contract in case of contract of
indemnity i.e, b/w the indemnifier and indemnity holder.
CONTRACT OF GUARANTEE
1 Section 126 of the Indian Contract Act 1872 defines 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 called the
“surety”; the person in respect of whose default the
guarantee is given is called the “principal debtor”, and the
person to whom the guarantee is given is called the
“creditor”.A guarantee may be either oral or written.
e.g, 'P' lends Rs. 5000/= to 'Q' and 'R' promises to 'P'
that if 'Q' does not pay the money back then 'R' will do so.
2 There are three parties
to the contract viz. the
creditor, the principal
debtor and the surety.
3 The liability of the
surety to the creditor
is secondary i.e, the surety is
liable only if the principal debtor
fails to perform his obligation.
4 In a contract of guarantee there is an existing debts or
duty, the performance of which is guaranteed by the surety.
5 In the contract of guarantee the surety , after discharges
the debts owing to the creditor, can proceed against the
principal debtor.
6 In case of contract of guarantee there are three contracts.
a) contract b/w the principal debtor and the creditor.
b) contract b/w the creditor and the surety.
c) contract b/w the surety and the principal debtor.
| Is This Answer Correct ? | 24 Yes | 4 No |
Answer / shankar tanikella
Unlike contract of indemnity where indemnifier is liable for
indemnified in a contract of guarantee the liability of the
surety is co-extensive with that of principal debtor and the
creditor can proceed with principal debtor and surety
simultaneously.Even the creditor with notice to principal
debtor can recover the dues from surety first .But the
surety will have a legal right to recover the monies he
paid to creditor from the principal debtor
| Is This Answer Correct ? | 26 Yes | 17 No |
Answer / sumit saurav
Indemnity means a promise to save a person harmless from the consequences of an act or to compensate. According Section 124 of the Indian Contract Act, 1872 contract of Indemnity state that the contract by which one party agree to save the other from the loss caused by him by the conduct of promissor himself. It is a bilateral contract whereas
Guarantee section 126 of the Indian Contract Act, 1872 state the contract of guarantee mean a contract to perform the promise or discharge.these are concurrence of three contracts.
| Is This Answer Correct ? | 6 Yes | 2 No |
Answer / l.veeraraghavan
Many Indian COurts have held that the creditor should first exhaust all the available means of recovery from the principal debtor before invoking the surety's liability under the contract.
| Is This Answer Correct ? | 8 Yes | 5 No |
Answer / sudhi chauhan
1.In casevof a contract of gaurantee there are three parties,but in contract of indemnity there are two parties,one who is indemnified other the indemnifior
2.A contract of gaurantee presupposes the principal debtor,a contract of indemnity is an original and direct engagement and may be made independently without the existence of a third party
3.a contract of gaurantee exists for security of the creditor whereas contract of indemnity is brought about for the reimbursement of loss
4.a gaurantor's liability is secondary so if principal debtor is not liable , the surety will also be not liable.a contract of indemnity creates the primary liability for indemnifier.
5.request by third party is essential in contract of gaurantee ,but in case of a contract of indemnity request or knowledge is not necessary.
6.contract of gaurantee must be in writing but contract of indemnity may be in writing or oral.
| Is This Answer Correct ? | 1 Yes | 1 No |
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