Types of special contracts 1. Indemnity and guarantee 2. Bailement and pledge 3.

Agency Indemnity One person Makes a Promise To another person To save from loss By doing something E.G. Insurance Agreement Sec - 124

Parties of indemnity Indemnifier: Person giving promise Indemnified: Person receiving promise

Nature of Indemnity It is a type of contingent contract Right of Indemnity holder Sec - 125 Indemnity Holder Is Entitled To Recover : All damages All sums paid as compromise to such suit.

Guarantee Sec - 126

One person Makes a Promise To another person To pay some money If some other person Makes default in payment of money Payable by him E.G. Surety in loan agreements

Types Of Guarantee

Specific Guarantee: For a single transaction. Continuing Guarantee: For many transactions It may be for a fixed time It may be revoked After revocation it will not apply to future transactions It remains applicable for past transactions

Parties Surety is person who gives the guarantee [section 126]

Debtor person for whose default guarantee is given Creditors The person to whom guarantee is given

Rights of sureities Against debtor Against creditor Against co-surities

Discharge of Surety Revocation -- notice to the creditor Sec -130 Specific guarantee cannot be revoked. Continuing guarantee -- revoked by death of surety, sec 131 Substituting new contract Sec 62. Conduct of the creditor Variation -- without the suretys consent Sec 133. Creditor makes a composition with debtor Sec 135. Creditors losses security given to him. Sec 141. By invalidation of contract of guarantee Sec 142.

Bailment MEANING: Sec 148 Bailment is Delivery of goods By one person to another For some purpose, They shall be returned

According to the directions of the person delivering them

Parties Person delivering goods is called the bailor Person to whom they are delivered is called the bailee. Sec 148 Characteristics of bailment Same goods to be returned but form of goods may be changed. E.g. when cloth is stitched by tailor. Examples : Placing an ornament in a bank locker is not bailment. Deposit of money in a bank is not bailment.

Case On Special Contract Vidya Ratan vs. Kota Transport Co. Ltd. on 3 May, 1965. Facts: It was averred that on 5-12-1949, Mrs. Madhay Das Hiralal of Kota, who were plaintiff's agents, delivered 27 mounds and 11 seers of cotton valued at Rs. 1266 to the defendant company Kota Transport Company Limited for being carried to Mangrol. This cotton was carried in a gas plant truck No. 564. Unfortunately, when the loaded truck had come near river Barod on the way it was found to have caught fire and the load was gutted.

 Accordingly the plaintiff demanded the value of the undelivered cotton from the defendant company, but as it did not care for the demandfiled the suit in the court of the Munsif, Kota. Mangilal Chopra of Mangrol filed the suit in the court of the Munsif, Kota for the recovery of an amount of Rs.1134 from Kota Transport Company Limited for non-delivery of 24 maunds and 11 seers of cotton which was consigned from Kota to Mangrol by a truck run under the management and control of the defendant company However, only 3 maunds of the cargo could be salvaged and delivered to the plaintiff.

LEGAL IMPLICATIONS A special plea was raised to the effect that Dhanna Lal, who had approached the defendant company for transporting these goods, was warned by the employees of the defendant company(Kota Transport) Dhanna Lal agreed that the goods be taken on his own risk and responsibility, the defendant company agreed to carry the goods. The judgement was held that Dhanna Lal had no authority to bind the plaintiff in this behalf. A decree for a sum of Rs. 1134 was passed against the defendant company by the munsif.

The defendant then went up in appeal to the District Judge, Lota. 1. There was no privity of contract between the plaintiff and the defendant's company and as such the latter could not be sued by the plaintiff 2. The learned District Judge came to the conclusion that there was no negligence on the part of the defendant's driver and it was by chance that the goods caught fire and consequently the defendant company could not be held responsible for the sam 3. The learned District Judge has held that the defendant was a common carrier, though in the present case its liability to pay the amount was limited by a special contract made by Dhanna Lal.

Sections used in the case 1. Section 2 of the Carriers Act, 1885 A common carrier as a person, other than the Government, engaged in the business of transporting for hire property from place to place, by land or inland navigation, for all persons indiscriminately 2. Section 6 of the Carriers Act, 1885 The liability of any common carrier for the loss of or damage to any property delivered to him to be carried is limited by special contract

Judgment 1. The principles governing the liability of a common carrier as contained in the Carriers Act, 1865, could be invoked in the present case, as at the time the incident happened Carriers Act had not been extended to Rajasthan 2. In the case of a common carrier there need not be any privacy of contract between the consignee of the goods and the carrier. A consignee, who is the owner of the goods, can certainly sue the common carrier for non-delivery So, The learned Judge reached the conclusion that the plaintiff could not sue the defendant for damages.