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    LLCM Assignment

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    noreen khalid
    The document compares and contrasts contracts of guarantee and contracts of indemnity. [1] A contract of guarantee involves three parties - a creditor, principal debtor, and surety - and the surety promises to save the creditor from loss caused by the principal debtor's conduct. [2] A contract of indemnity only involves two parties, an indemnifier and indemnity holder, where the indemnifier promises to compensate the indemnity holder for any losses. [3] Key differences include the number of parties involved, whether the liability is primary or secondary, and legal rights around subrogation and filing suits.

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    LLCM Assignment

    Uploaded by

    noreen khalid
    37 views3 pages
    The document compares and contrasts contracts of guarantee and contracts of indemnity. [1] A contract of guarantee involves three parties - a creditor, principal debtor, and surety - and the surety promises to save the creditor from loss caused by the principal debtor's conduct. [2] A contract of indemnity only involves two parties, an indemnifier and indemnity holder, where the indemnifier promises to compensate the indemnity holder for any losses. [3] Key differences include the number of parties involved, whether the liability is primary or secondary, and legal rights around subrogation and filing suits.

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    The document compares and contrasts contracts of guarantee and contracts of indemnity. [1] A contract of guarantee involves three parties - a creditor, principal debtor, and surety - and the surety promises to save the creditor from loss caused by the principal debtor's conduct. [2] A contract of indemnity only involves two parties, an indemnifier and indemnity holder, where the indemnifier promises to compensate the indemnity holder for any losses. [3] Key differences include the number of parties involved, whether the liability is primary or secondary, and legal rights around subrogation and filing suits.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    37 views3 pages

    LLCM Assignment

    Uploaded by

    noreen khalid
    The document compares and contrasts contracts of guarantee and contracts of indemnity. [1] A contract of guarantee involves three parties - a creditor, principal debtor, and surety - and the surety promises to save the creditor from loss caused by the principal debtor's conduct. [2] A contract of indemnity only involves two parties, an indemnifier and indemnity holder, where the indemnifier promises to compensate the indemnity holder for any losses. [3] Key differences include the number of parties involved, whether the liability is primary or secondary, and legal rights around subrogation and filing suits.

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    MBA 3.

    5 (Session 2k16)
    PROJECT REPORT

    “Difference between Contract of Indemnity


    and Contract of Guarantee”

    “Labour Law and Contract Management”

    SUBMITTED TO: Mr. Muhammad Arshad Baig


    SUBMITTED BY:

    Hira Naeem
    2016-MBA-520

    20th October, 2019


    Difference between the contract of guarantee and contract of indemnity is given below:

    Contract of Guarantee Contract of Indemnity


    Definition

    A contract by which one party promises to


    A contract where one party promises to save
    save the other from loss caused to him by
    the other from any loss caused to him by the
    the conduct of the promisor himself or by
    conduct of promisor himself or any other
    the conduct of any other person is called a
    person is called contract of indemnity.
    contract of indemnity.

    Section

    Section 126 of contract act, 1872 Section 124 of contract act, 1872

    Parties
    Three parties in this contract:
    Two parties in this contract:
    1. Creditor
    1. Indemnifier
    2. Principal Debtor
    2. Indemnity Holder
    3. Surety
    Number of Contract
    Three contracts involved:
     Creditor and Principal Debtor One contract involved:
     Principal Debtor and Surety  Indemnifier and Indemnity Holder
     Creditor and Surety
    Type of contracts
     Contract between surety and
    principal debtor is implied contract. Between indemnifier and indemnity holder
     Between creditor and principal Express and specific contract
    debtor is Express contract
    Object/Purpose
    To give assurance to creditor. To compensate the loss.
    Maturity

    When there is any default by promise


    When any incident happens.
    (Principal Debtor).
    Existence of liability
    The liability of surety exists when the
    The liability of indemnifier does not exist.
    principal debtor is on his default.
    Interest
    Real interest No real interest
    Consideration
    There is no consideration for the surety. Consideration exists here.

    Legal Rights
    In the case of indemnity, the surety does not
    In case of guarantee, promisor cannot file
    require any subrogation for filing of suit. He
    the suit against third person without the
    gets the right to suit the principal debtor as
    surrender of principal debtor.
    and when the surety pays the debt.

    Degree of liability

    Liability of surety is secondary. Liability of indemnifier is primary.

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