A contract of indemnity may be classified as ___ or ___.

Express or implied

True or False: The liability of the indemnifier only arises after the indemnified has actually suffered a loss.

False. The liability of the indemnifier arises as soon as the loss becomes absolute, certain, or imminent.

What distinguishes a contract of guarantee from a contract of indemnity?

Contract of guarantee has three parties.

• Involves creditor, debtor, surety.

• Indemnity involves two parties only.

• Guarantee ensures creditor's payment.

Fill in the blank: The Indian Contract Act defines a contract of indemnity under Section ___.

124

What are the rights of an indemnity holder according to Section 125?

The rights include recovering damages, costs of litigation, sums paid under compromise, and the right to sue for specific performance.

True or False: In a contract of insurance, the insurer is the indemnifier.

True. Every contract of insurance, except life insurance, is essentially a contract of indemnity.

What key factor must be present for a bailment to occur?

Delivery of goods is essential.

• Involves transferring possession.

• Goods must be returned later.

• Contract specifies purpose and terms.

A pledge is a specific type of bailment that serves as security for a ___ or ___ .

Debt or fulfillment of an obligation

Fill in the blank: The bailor is responsible for disclosing any known faults in the bailed goods that could expose the bailee to ___ risk.

Extraordinary

In a contract of indemnity, the indemnifier promises to compensate the indemnified for losses caused by ___ or ___ of the promisor or another party.

The conduct; actions