Surety’s liability The liability of the surety is co- extensive with that of the principal debtor, unless it is otherwise provided by the contract.IllustrationA guarantees to B the payment of a bill of exchange by C, the acceptor. The bill is dishonoured by C. A is liable, not onlyfor the amount of the bill, but […]

Consideration for guarantee Anything done, or any promise made, for the benefit of the principal debtor, may be a sufficient consideration to the surety for giving the guarantee.Illustrations(a) B requests A to sell and deliver to him goods on credit. A agrees to do so, provided C will guarantee the payment of theprice of the

“Contract of guarantee”, “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 hisdefault. The person who gives the guarantee is called the “surety”; the person in respect of whose defaultthe guarantee is given is called the “principal

Rights of indemnity-holder when sued The promise in a contract of indemnity, acting within the scope of his authority, is entitled to recover from the promisor—(1) all damages which he may be compelled to pay in any suit in respect of any matter to whichthe promise to indemnify applies;(2) all costs which he may be

“Contract of indemnity” defined 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”.IllustrationA contracts to indemnify B against the consequences of any proceedings which C may take

Party rightfully rescinding contract, entitled to compensation A person who rightfully rescinds a contract is entitled to compensation for any damage which he has sustained through thenon-fulfilment of the contract.IllustrationA, a singer, contracts with B, the manager of a theatre, to sing at his theatre for two nights in every week during the next twomonths,

Compensation for breach of contract where penalty stipulated for [When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if thecontract contains any other stipulation by way of penalty, the party complaining of the breach is entitled,whether or not

Compensation for loss or damage caused by breach of contract When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usualcourse of things from such

Liability of person to whom money is paid, or thing delivered, by mistake or under coercion A person to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or return it.Illustrations(a) A and B jointly owe 100 rupees to C, A alone pays the amount to C, and B,

Responsibility of finder of goods A person who finds goods belonging to another, and takes them into his custody, is subject to the same responsibility as a bailee Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return