Question 2 (b)
The lost share certificate and indemnity
9.375 marks
- Time to write
- About 19 minutes
From an older CBCS paper
Question
Question 2 (b) · 9.375 marksHaving lost his share certificate of Sterling Ltd., A asks the company for a duplicate. What will he be asked by the company to furnish? Does that give rise to a contract, and who are its parties? Why is it asked? Giving examples, Define it, and explain its features.
Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.
Before you write
Read off the question and its marks
Read from the question
- Does that give…?A case problem: state the rule and its section, apply it to these facts, then answer in one line (yes or no, and why).
- examplesExamples are asked for: one short example with each point.
What the paper leaves open
The paper prints no mark per question (any four of six, equal marks, 75 in all); each question is reckoned here at 18.75 marks. Marked as one question of 18.75 marks; answered here in 2 parts of 9.375 marks each (marks inferred).
Write it in this order
- Read the facts; underline who did what, and the exact question 1 min
- 1 The lost share certificate 9.4 marks 17 min
- Check: section named, answer stated in one line 1 min
Try it first. About 19 minutes for 9.375 marks. Write it out, then open the solution.
Solution
Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.
The lost share certificate. Sterling Ltd. will issue A a duplicate certificate, but it then runs a risk: if the original turns up in someone else's hands, the company may have to answer to that person as well. So it asks A to promise to make good any loss it suffers on that account. That promise is a contract of indemnity.
- What he must furnish: an indemnity, usually in the form of an indemnity bond, by which A undertakes to save the company from loss arising from the issue of the duplicate.
- Contract and parties: a contract of indemnity arises, between A, the indemnifier (promisor), and Sterling Ltd., the indemnity-holder (promisee).
- Why it is asked: to protect the company against a claim by a holder of the original certificate.
Definition (s. 124): a contract of indemnity is one in which one party undertakes to protect the other against loss, whether that loss is caused by the promisor's own conduct or by anyone else's. Example: a shipping agent promises an exporter to make good any loss the exporter suffers if a carrier the agent recommended damages the goods.
- Two parties: the indemnifier and the indemnity-holder.
- The indemnifier's liability is primary: he answers for the loss itself, not as a back-up to someone else.
- Rights of the indemnity-holder when sued (s. 125), provided he acts within the scope of his authority:
- all damages he is compelled to pay in a suit about a matter the indemnity covers;
- his costs in such a suit, if he did not go against the indemnifier's instructions and acted as a prudent person would have acted without an indemnity, or if the indemnifier authorised him to bring or defend the suit;
- sums paid under a compromise of such a suit, if the compromise did not go against the indemnifier's instructions and was one a prudent person would have made without an indemnity, or if the indemnifier authorised it.
Where the 9.375 marks sit
| # | Component | Marks |
|---|---|---|
| 1 | The lost share certificate | 9.375 |
| Total | 9.375 |
Report a problemopens an email to admin@getkunji.com with the question IDBLH21-Q2balready filled in.