Saturday, 20 April 2019

Indian Contract Act, 1872:

Indian Contract Act, 1872:
Banking involves interaction between a banker and customer. A customer of a bank may be a depositor, borrower or any other person merely utilizing one of the various services provided by the banker. The relation between the Banker and the customer will vary according to the transaction carried out. The relationship may be Debtor- Creditor, Creditor- Debtor, Bailor-bailee, etc.
The interaction of a bank with its customer creates certain obligations and gives certain rights to both the bank and the customer. All Agreements are contracts, if they are made by parties competent to contract, for a lawful consideration and with a lawful object, and are not expressly declared to be void. All Banking transactions are therefore, separate contracts.
Contract of indemnity-
A contract by which one party promises to save the other from loss caused to him by the contract of the promisor himself, or by the conduct of any other person, is called a contract of indemnity.
There are two parties to the contract of Indemnity-i.e. the indemnifier and the indemnified. This is defined in Section124 of the Indian Contract Act.
Contract of guarantee:
The contract of guarantee is defined in Section126. There are three parties to the contract of guarantee. They are: Surety, Principal debtor and creditor.
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.
Bailment:
A bailment is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them. The person delivering the goods is called the bailor‗. The person to whom they are delivered is called the bailee‗. (Section148).
Pledge:
The bailment of goods as security for payment of a debt or performance of a promise is called pledge. The bailor is in this case called pawnor. The bailee is called pawnee.

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