Question 3 OR (a)
Distinctions: bailment and pledge; sub-agent and substituted agent; indemnity and guarantee
12 marks
- Time to write
- About 24 minutes
- Notes
- Crux notes
Question
Question 3 OR (a) · 12 marksDistinguish between each of the following pairs:
Bailment and Pledge
A sub agent and a substituted agent
Indemnity and Guarantee
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
- (i)–(iii)3 items, each marked on its own: give each its share.
- Distinguish betweenSet the differences out in a table, basis by basis, not as two separate essays.
Write it in this order
The parts stand alone: start with the one you are surest of.
- Read; underline the asks; jot your points 2 min
- 1 (i) Bailment and pledge 4 marks 7 min
- 2 (ii) Sub-agent and substituted agent 4 marks 7 min
- 3 (iii) Indemnity and guarantee 4 marks 6 min
- Check: every ask answered, key terms underlined 2 min
Short on time? A few lines on every part beat a full answer to one: each part is capped at its own marks.
Try it first. About 24 minutes for 12 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.
(i) Bailment and pledge. Bailment is the delivery of goods for a purpose, upon a contract that they be returned or disposed of according to the bailor's directions when the purpose is accomplished (s. 148). Pledge is a “bailment of goods as security for payment of a debt or performance of a promise” (s. 172).
1Rain ruins the stored crates; the godown keeper pays Dinesh for the loss himself, as promised.
IndemnityThe promisor undertakes to make good a loss the promisee may suffer.
2Three people now: the borrower comes up empty, and his surety steps forward to answer for him.
GuaranteeThe promisor (the surety) undertakes to answer for a third person, the principal debtor, if that person fails to pay or perform what he owes to the creditor.
| Basis | Bailment | Pledge |
|---|---|---|
| Purpose | Any purpose (custody, repair, carriage, hire) | Security for a debt or promise |
| Parties | Bailor, bailee | Pawnor, pawnee |
| Use of goods | As the terms allow | Pawnee may not use the goods |
| Right of sale | None; only a lien for charges | Pawnee may sell on default, after reasonable notice |
(ii) Sub-agent and substituted agent. “A sub-agent is a person employed by, and acting under the control of, the original agent in the business of the agency” (s. 191). A substituted agent is a person whom the agent, having express or implied authority to name another, names to act for the principal; such a person is not a sub-agent but becomes the principal's agent for the part of the business entrusted to him (s. 194).
| Basis | Sub-agent | Substituted agent |
|---|---|---|
| Appointed by | The agent, under the agent's control | The agent, on the principal's authority, for the principal |
| Privity | None with the principal; responsible to the agent | Direct relation with the principal |
| Liability | The agent is responsible to the principal for his acts | Responsible directly to the principal; the agent is liable only if he failed to use ordinary prudence in selecting him |
(iii) Indemnity and guarantee:
| Basis | Indemnity | Guarantee |
|---|---|---|
| Parties | Two: indemnifier and indemnity holder | Three: creditor, principal debtor, surety |
| Contracts | One contract | Three contracts among the parties |
| Liability | Primary and independent | Secondary; arises on the principal debtor's default |
| Right to sue third party | Indemnifier cannot sue a third party in his own name (no privity) unless the right is assigned | Surety, on paying, gets all the creditor's rights against the principal debtor |
| Purpose | Reimbursement of loss | Security for the creditor |
Where the 12 marks sit
| # | Component | Marks |
|---|---|---|
| 1 | (i) Bailment and pledge | 4 |
| 2 | (ii) Sub-agent and substituted agent | 4 |
| 3 | (iii) Indemnity and guarantee | 4 |
| Total | 12 |
Report a problemopens an email to admin@getkunji.com with the question ID1504-Q3aORalready filled in.