Bailment

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CA Paul (Querist)
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18 September 2014 duties and rights of both bailor and bailee and difference between a contract of indemnity.and guarantee

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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19 September 2014 Both contracts may be distinguished in the following cases :

1. Difference in Meaning :-

Contract of indemnity : In the contract of indemnity one person promises to save the other from any loss.

Contract of guarantee : In the contract of guarantee one person gives guarantee for the performance of the contract.

2. Difference in the Number of Parties :-

Contract of indemnity : Under the contract of indemnity there are two parties.

Contract of guarantee : Under the contract of guarantee there are three parties.

3. Difference in the Liability :-

Contract of indemnity : Under indemnity contract the basic liability falls on the indemnifies.

Contract of guarantee : In case of guarantee contract surety has the secondary liability.

4. Difference in the Number Of Contracts :-

Contract of indemnity : Under the indemnity contract there is one contract only.

Contract of guarantee : Under the contract of guarantee there must be at least three contracts.

5. Difference in the Nature of Interest :-

Contract of indemnity : In case of indemnity contract, indemnifies has the interest in earning commission and premium.

Contract of guarantee : In case of guarantor he has no any other interest except guarantee.

6. Difference in the Right of Claim :-

Contract of indemnity : The indemnifies cannot sue the third party.

Contract of guarantee : Guarantor is entitled to proceed against the principal debtor in his own name. If he has paid the debt.

7. Difference in the Performance of Contract :-

Contract of indemnity : Contract of indemnity depends upon the possibility of risk or loss.

Contract of guarantee : In case of guarantee there is an existing debt or duty performance about which guarantee is given.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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19 September 2014 For Rights and Duties of Bailor and Bailee see below link--

http://www.icaiknowledgegateway.org/littledms/folder1/bailment-and-pledge.pdf