Specific Contracts (Indemnity, Guarantee, Bailment, Pledge, and Agency)

The Indian Contract Act also governs specific types of contracts, providing detailed rights and duties of parties under special circumstances.

Contracts of Indemnity and Guarantee (Sections 124–147)

• Section 124: Defines indemnity as a contract to save another from loss caused by the conduct of the promisor or another person.
• Section 126: Defines a contract of guarantee as one where a surety undertakes to discharge the liability of a third person.
• Rights of indemnifier and surety (Sections 140–145) are key for exams.

Contracts of Bailment and Pledge (Sections 148–181)

• Section 148: Bailment — delivery of goods for some purpose upon a contract that they shall be returned.
• Section 172: Pledge — bailment as security for a debt or performance of a promise.
• Duties of bailor, bailee, and pawnee are critical to understand.

Contracts of Agency (Sections 182–238)

• Section 182: Defines agent and principal.
• Section 186–189: Cover creation of agency.
• Sections 201–210: Termination of agency.
• Section 226: Contract entered by agent binds the principal.

Recent Updates

While no specific amendments exist for these chapters, the 2024 Amendment to Section 15 (on coercion) indirectly affects guarantees and agency contracts where consent is questioned.

The digital economy has introduced e-agency and online bailment, where goods are delivered electronically (e.g., digital pledges). Judiciary aspirants must stay updated with these modern interpretations.

Review Questions (Lesson 3)

1. Distinguish between contracts of indemnity and guarantee with suitable examples.
2. Explain the duties of a bailee under Sections 151–152.
3. What are the rights of a pawnee in case of default by the pawnor?
4. How is an agency created and terminated under the Indian Contract Act?
5. How do modern e-contracts and digital pledges affect traditional concepts of agency and bailment?

Summary

This three-part study material covers:

• Lesson 1: Contract formation, consent, and recent amendments.
• Lesson 2: Performance, breach, and remedies.
• Lesson 3: Specific contracts and modern interpretations.