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Directions: Read the following passage and answer the question.The term indemnity literally means security against loss. In a contract of indemnity, one party, i.e. the indemnifier, promise to compensate the other party, i.e. the indemnified, against the loss suffered by the other. The English law defines a contract of indemnity as a promise to save a person harmless from the consequences of an act. Thus, it includes within its ambit losses caused not merely by human agency, but also those caused by accident or fire or other natural calamities. As per Section 124 of the Contract Act, a contract of indemnity is that contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person.The definition provided by the Indian Contract Act confines itself to the losses occasioned due to the act of the promisor or due to the act of any other person. Under a contract of indemnity, liability of the promisor arises from loss caused to the promisee by the conduct of the promisor himself, or as per the terms in the indemnity contract. Every contract of insurance, other than life insurance, is a contract of indemnity. The definition is restricted to cases where loss has been caused by some human agency.Section 124 deals with one particular kind of indemnity which arises from a promise made by an indemnifier to save the indemnified from the loss caused to him by the conduct of the indemnifier himself or by the conduct of any other person, but does not deal with those classes of cases where the indemnity arises from loss caused by events or accidents which do not depend upon the conduct of indemnifier or any other person.In a contract of indemnity, there are two parties, i.e. indemnifier and indemnified. A contract of guarantee involves three parties, i.e. creditor, principal debtor and surety. An indemnity is for reimbursement of a loss, while a guarantee is for security of the creditor. In a contract of indemnity, the liability of the indemnifier is primary and arises when the contingent event occurs. In case of contract of guarantee, the liability of surety is secondary and arises when the principal debtor defaults. The indemnifier after performing his part of the promise has no rights against the third party and he can sue the third party only if there is an assignment in his favour. Whereas in a contract of guarantee, the surety steps into the shoes of the creditor on discharge of his liability, and may sue the principal debtor.[Extracted with edits and revision from Contract of Indemnity, article by taxmanagementindia]Q. A borrows funds from B to launch a new business venture, and at Bs insistence, A designates C as a surety. Unfortunately, As business is severely impacted by a market recession, leading to his inability to settle his financial obligations. In response, B initiates legal action against C to recover the outstanding debt from A. Determine the outcome.a)The obligation to settle the debt defaults to As family members.b)B must pursue legal action against A independently to recover the loan.c)C is liable for payment as he has acted as As surety.d)No party is responsible for repaying the borrowed amount due to the absence of voluntary consent in appointing the surety.Correct answer is option 'C'. Can you explain this answer? for CLAT 2024 is part of CLAT preparation. The Question and answers have been prepared according to the CLAT exam syllabus. Information about Directions: Read the following passage and answer the question.The term indemnity literally means security against loss. In a contract of indemnity, one party, i.e. the indemnifier, promise to compensate the other party, i.e. the indemnified, against the loss suffered by the other. The English law defines a contract of indemnity as a promise to save a person harmless from the consequences of an act. Thus, it includes within its ambit losses caused not merely by human agency, but also those caused by accident or fire or other natural calamities. As per Section 124 of the Contract Act, a contract of indemnity is that contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person.The definition provided by the Indian Contract Act confines itself to the losses occasioned due to the act of the promisor or due to the act of any other person. Under a contract of indemnity, liability of the promisor arises from loss caused to the promisee by the conduct of the promisor himself, or as per the terms in the indemnity contract. Every contract of insurance, other than life insurance, is a contract of indemnity. The definition is restricted to cases where loss has been caused by some human agency.Section 124 deals with one particular kind of indemnity which arises from a promise made by an indemnifier to save the indemnified from the loss caused to him by the conduct of the indemnifier himself or by the conduct of any other person, but does not deal with those classes of cases where the indemnity arises from loss caused by events or accidents which do not depend upon the conduct of indemnifier or any other person.In a contract of indemnity, there are two parties, i.e. indemnifier and indemnified. A contract of guarantee involves three parties, i.e. creditor, principal debtor and surety. An indemnity is for reimbursement of a loss, while a guarantee is for security of the creditor. In a contract of indemnity, the liability of the indemnifier is primary and arises when the contingent event occurs. In case of contract of guarantee, the liability of surety is secondary and arises when the principal debtor defaults. The indemnifier after performing his part of the promise has no rights against the third party and he can sue the third party only if there is an assignment in his favour. Whereas in a contract of guarantee, the surety steps into the shoes of the creditor on discharge of his liability, and may sue the principal debtor.[Extracted with edits and revision from Contract of Indemnity, article by taxmanagementindia]Q. A borrows funds from B to launch a new business venture, and at Bs insistence, A designates C as a surety. Unfortunately, As business is severely impacted by a market recession, leading to his inability to settle his financial obligations. In response, B initiates legal action against C to recover the outstanding debt from A. Determine the outcome.a)The obligation to settle the debt defaults to As family members.b)B must pursue legal action against A independently to recover the loan.c)C is liable for payment as he has acted as As surety.d)No party is responsible for repaying the borrowed amount due to the absence of voluntary consent in appointing the surety.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CLAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions: Read the following passage and answer the question.The term indemnity literally means security against loss. In a contract of indemnity, one party, i.e. the indemnifier, promise to compensate the other party, i.e. the indemnified, against the loss suffered by the other. The English law defines a contract of indemnity as a promise to save a person harmless from the consequences of an act. Thus, it includes within its ambit losses caused not merely by human agency, but also those caused by accident or fire or other natural calamities. As per Section 124 of the Contract Act, a contract of indemnity is that contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person.The definition provided by the Indian Contract Act confines itself to the losses occasioned due to the act of the promisor or due to the act of any other person. Under a contract of indemnity, liability of the promisor arises from loss caused to the promisee by the conduct of the promisor himself, or as per the terms in the indemnity contract. Every contract of insurance, other than life insurance, is a contract of indemnity. The definition is restricted to cases where loss has been caused by some human agency.Section 124 deals with one particular kind of indemnity which arises from a promise made by an indemnifier to save the indemnified from the loss caused to him by the conduct of the indemnifier himself or by the conduct of any other person, but does not deal with those classes of cases where the indemnity arises from loss caused by events or accidents which do not depend upon the conduct of indemnifier or any other person.In a contract of indemnity, there are two parties, i.e. indemnifier and indemnified. A contract of guarantee involves three parties, i.e. creditor, principal debtor and surety. An indemnity is for reimbursement of a loss, while a guarantee is for security of the creditor. In a contract of indemnity, the liability of the indemnifier is primary and arises when the contingent event occurs. In case of contract of guarantee, the liability of surety is secondary and arises when the principal debtor defaults. The indemnifier after performing his part of the promise has no rights against the third party and he can sue the third party only if there is an assignment in his favour. Whereas in a contract of guarantee, the surety steps into the shoes of the creditor on discharge of his liability, and may sue the principal debtor.[Extracted with edits and revision from Contract of Indemnity, article by taxmanagementindia]Q. A borrows funds from B to launch a new business venture, and at Bs insistence, A designates C as a surety. Unfortunately, As business is severely impacted by a market recession, leading to his inability to settle his financial obligations. In response, B initiates legal action against C to recover the outstanding debt from A. Determine the outcome.a)The obligation to settle the debt defaults to As family members.b)B must pursue legal action against A independently to recover the loan.c)C is liable for payment as he has acted as As surety.d)No party is responsible for repaying the borrowed amount due to the absence of voluntary consent in appointing the surety.Correct answer is option 'C'. Can you explain this answer?.

Solutions for Directions: Read the following passage and answer the question.The term indemnity literally means security against loss. In a contract of indemnity, one party, i.e. the indemnifier, promise to compensate the other party, i.e. the indemnified, against the loss suffered by the other. The English law defines a contract of indemnity as a promise to save a person harmless from the consequences of an act. Thus, it includes within its ambit losses caused not merely by human agency, but also those caused by accident or fire or other natural calamities. As per Section 124 of the Contract Act, a contract of indemnity is that contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person.The definition provided by the Indian Contract Act confines itself to the losses occasioned due to the act of the promisor or due to the act of any other person. Under a contract of indemnity, liability of the promisor arises from loss caused to the promisee by the conduct of the promisor himself, or as per the terms in the indemnity contract. Every contract of insurance, other than life insurance, is a contract of indemnity. The definition is restricted to cases where loss has been caused by some human agency.Section 124 deals with one particular kind of indemnity which arises from a promise made by an indemnifier to save the indemnified from the loss caused to him by the conduct of the indemnifier himself or by the conduct of any other person, but does not deal with those classes of cases where the indemnity arises from loss caused by events or accidents which do not depend upon the conduct of indemnifier or any other person.In a contract of indemnity, there are two parties, i.e. indemnifier and indemnified. A contract of guarantee involves three parties, i.e. creditor, principal debtor and surety. An indemnity is for reimbursement of a loss, while a guarantee is for security of the creditor. In a contract of indemnity, the liability of the indemnifier is primary and arises when the contingent event occurs. In case of contract of guarantee, the liability of surety is secondary and arises when the principal debtor defaults. The indemnifier after performing his part of the promise has no rights against the third party and he can sue the third party only if there is an assignment in his favour. Whereas in a contract of guarantee, the surety steps into the shoes of the creditor on discharge of his liability, and may sue the principal debtor.[Extracted with edits and revision from Contract of Indemnity, article by taxmanagementindia]Q. A borrows funds from B to launch a new business venture, and at Bs insistence, A designates C as a surety. Unfortunately, As business is severely impacted by a market recession, leading to his inability to settle his financial obligations. In response, B initiates legal action against C to recover the outstanding debt from A. Determine the outcome.a)The obligation to settle the debt defaults to As family members.b)B must pursue legal action against A independently to recover the loan.c)C is liable for payment as he has acted as As surety.d)No party is responsible for repaying the borrowed amount due to the absence of voluntary consent in appointing the surety.Correct answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for CLAT. Download more important topics, notes, lectures and mock test series for CLAT Exam by signing up for free.

Here you can find the meaning of Directions: Read the following passage and answer the question.The term indemnity literally means security against loss. In a contract of indemnity, one party, i.e. the indemnifier, promise to compensate the other party, i.e. the indemnified, against the loss suffered by the other. The English law defines a contract of indemnity as a promise to save a person harmless from the consequences of an act. Thus, it includes within its ambit losses caused not merely by human agency, but also those caused by accident or fire or other natural calamities. As per Section 124 of the Contract Act, a contract of indemnity is that contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person.The definition provided by the Indian Contract Act confines itself to the losses occasioned due to the act of the promisor or due to the act of any other person. Under a contract of indemnity, liability of the promisor arises from loss caused to the promisee by the conduct of the promisor himself, or as per the terms in the indemnity contract. Every contract of insurance, other than life insurance, is a contract of indemnity. The definition is restricted to cases where loss has been caused by some human agency.Section 124 deals with one particular kind of indemnity which arises from a promise made by an indemnifier to save the indemnified from the loss caused to him by the conduct of the indemnifier himself or by the conduct of any other person, but does not deal with those classes of cases where the indemnity arises from loss caused by events or accidents which do not depend upon the conduct of indemnifier or any other person.In a contract of indemnity, there are two parties, i.e. indemnifier and indemnified. A contract of guarantee involves three parties, i.e. creditor, principal debtor and surety. An indemnity is for reimbursement of a loss, while a guarantee is for security of the creditor. In a contract of indemnity, the liability of the indemnifier is primary and arises when the contingent event occurs. In case of contract of guarantee, the liability of surety is secondary and arises when the principal debtor defaults. The indemnifier after performing his part of the promise has no rights against the third party and he can sue the third party only if there is an assignment in his favour. Whereas in a contract of guarantee, the surety steps into the shoes of the creditor on discharge of his liability, and may sue the principal debtor.[Extracted with edits and revision from Contract of Indemnity, article by taxmanagementindia]Q. A borrows funds from B to launch a new business venture, and at Bs insistence, A designates C as a surety. Unfortunately, As business is severely impacted by a market recession, leading to his inability to settle his financial obligations. In response, B initiates legal action against C to recover the outstanding debt from A. Determine the outcome.a)The obligation to settle the debt defaults to As family members.b)B must pursue legal action against A independently to recover the loan.c)C is liable for payment as he has acted as As surety.d)No party is responsible for repaying the borrowed amount due to the absence of voluntary consent in appointing the surety.Correct answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Directions: Read the following passage and answer the question.The term indemnity literally means security against loss. In a contract of indemnity, one party, i.e. the indemnifier, promise to compensate the other party, i.e. the indemnified, against the loss suffered by the other. The English law defines a contract of indemnity as a promise to save a person harmless from the consequences of an act. Thus, it includes within its ambit losses caused not merely by human agency, but also those caused by accident or fire or other natural calamities. As per Section 124 of the Contract Act, a contract of indemnity is that contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person.The definition provided by the Indian Contract Act confines itself to the losses occasioned due to the act of the promisor or due to the act of any other person. Under a contract of indemnity, liability of the promisor arises from loss caused to the promisee by the conduct of the promisor himself, or as per the terms in the indemnity contract. Every contract of insurance, other than life insurance, is a contract of indemnity. The definition is restricted to cases where loss has been caused by some human agency.Section 124 deals with one particular kind of indemnity which arises from a promise made by an indemnifier to save the indemnified from the loss caused to him by the conduct of the indemnifier himself or by the conduct of any other person, but does not deal with those classes of cases where the indemnity arises from loss caused by events or accidents which do not depend upon the conduct of indemnifier or any other person.In a contract of indemnity, there are two parties, i.e. indemnifier and indemnified. A contract of guarantee involves three parties, i.e. creditor, principal debtor and surety. An indemnity is for reimbursement of a loss, while a guarantee is for security of the creditor. In a contract of indemnity, the liability of the indemnifier is primary and arises when the contingent event occurs. In case of contract of guarantee, the liability of surety is secondary and arises when the principal debtor defaults. The indemnifier after performing his part of the promise has no rights against the third party and he can sue the third party only if there is an assignment in his favour. Whereas in a contract of guarantee, the surety steps into the shoes of the creditor on discharge of his liability, and may sue the principal debtor.[Extracted with edits and revision from Contract of Indemnity, article by taxmanagementindia]Q. A borrows funds from B to launch a new business venture, and at Bs insistence, A designates C as a surety. Unfortunately, As business is severely impacted by a market recession, leading to his inability to settle his financial obligations. In response, B initiates legal action against C to recover the outstanding debt from A. Determine the outcome.a)The obligation to settle the debt defaults to As family members.b)B must pursue legal action against A independently to recover the loan.c)C is liable for payment as he has acted as As surety.d)No party is responsible for repaying the borrowed amount due to the absence of voluntary consent in appointing the surety.Correct answer is option 'C'. Can you explain this answer?, a detailed solution for Directions: Read the following passage and answer the question.The term indemnity literally means security against loss. In a contract of indemnity, one party, i.e. the indemnifier, promise to compensate the other party, i.e. the indemnified, against the loss suffered by the other. The English law defines a contract of indemnity as a promise to save a person harmless from the consequences of an act. Thus, it includes within its ambit losses caused not merely by human agency, but also those caused by accident or fire or other natural calamities. As per Section 124 of the Contract Act, a contract of indemnity is that contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person.The definition provided by the Indian Contract Act confines itself to the losses occasioned due to the act of the promisor or due to the act of any other person. Under a contract of indemnity, liability of the promisor arises from loss caused to the promisee by the conduct of the promisor himself, or as per the terms in the indemnity contract. Every contract of insurance, other than life insurance, is a contract of indemnity. The definition is restricted to cases where loss has been caused by some human agency.Section 124 deals with one particular kind of indemnity which arises from a promise made by an indemnifier to save the indemnified from the loss caused to him by the conduct of the indemnifier himself or by the conduct of any other person, but does not deal with those classes of cases where the indemnity arises from loss caused by events or accidents which do not depend upon the conduct of indemnifier or any other person.In a contract of indemnity, there are two parties, i.e. indemnifier and indemnified. A contract of guarantee involves three parties, i.e. creditor, principal debtor and surety. An indemnity is for reimbursement of a loss, while a guarantee is for security of the creditor. In a contract of indemnity, the liability of the indemnifier is primary and arises when the contingent event occurs. In case of contract of guarantee, the liability of surety is secondary and arises when the principal debtor defaults. The indemnifier after performing his part of the promise has no rights against the third party and he can sue the third party only if there is an assignment in his favour. Whereas in a contract of guarantee, the surety steps into the shoes of the creditor on discharge of his liability, and may sue the principal debtor.[Extracted with edits and revision from Contract of Indemnity, article by taxmanagementindia]Q. A borrows funds from B to launch a new business venture, and at Bs insistence, A designates C as a surety. Unfortunately, As business is severely impacted by a market recession, leading to his inability to settle his financial obligations. In response, B initiates legal action against C to recover the outstanding debt from A. Determine the outcome.a)The obligation to settle the debt defaults to As family members.b)B must pursue legal action against A independently to recover the loan.c)C is liable for payment as he has acted as As surety.d)No party is responsible for repaying the borrowed amount due to the absence of voluntary consent in appointing the surety.Correct answer is option 'C'. Can you explain this answer? has been provided alongside types of Directions: Read the following passage and answer the question.The term indemnity literally means security against loss. In a contract of indemnity, one party, i.e. the indemnifier, promise to compensate the other party, i.e. the indemnified, against the loss suffered by the other. The English law defines a contract of indemnity as a promise to save a person harmless from the consequences of an act. Thus, it includes within its ambit losses caused not merely by human agency, but also those caused by accident or fire or other natural calamities. As per Section 124 of the Contract Act, a contract of indemnity is that contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person.The definition provided by the Indian Contract Act confines itself to the losses occasioned due to the act of the promisor or due to the act of any other person. Under a contract of indemnity, liability of the promisor arises from loss caused to the promisee by the conduct of the promisor himself, or as per the terms in the indemnity contract. Every contract of insurance, other than life insurance, is a contract of indemnity. The definition is restricted to cases where loss has been caused by some human agency.Section 124 deals with one particular kind of indemnity which arises from a promise made by an indemnifier to save the indemnified from the loss caused to him by the conduct of the indemnifier himself or by the conduct of any other person, but does not deal with those classes of cases where the indemnity arises from loss caused by events or accidents which do not depend upon the conduct of indemnifier or any other person.In a contract of indemnity, there are two parties, i.e. indemnifier and indemnified. A contract of guarantee involves three parties, i.e. creditor, principal debtor and surety. An indemnity is for reimbursement of a loss, while a guarantee is for security of the creditor. In a contract of indemnity, the liability of the indemnifier is primary and arises when the contingent event occurs. In case of contract of guarantee, the liability of surety is secondary and arises when the principal debtor defaults. The indemnifier after performing his part of the promise has no rights against the third party and he can sue the third party only if there is an assignment in his favour. Whereas in a contract of guarantee, the surety steps into the shoes of the creditor on discharge of his liability, and may sue the principal debtor.[Extracted with edits and revision from Contract of Indemnity, article by taxmanagementindia]Q. A borrows funds from B to launch a new business venture, and at Bs insistence, A designates C as a surety. Unfortunately, As business is severely impacted by a market recession, leading to his inability to settle his financial obligations. In response, B initiates legal action against C to recover the outstanding debt from A. Determine the outcome.a)The obligation to settle the debt defaults to As family members.b)B must pursue legal action against A independently to recover the loan.c)C is liable for payment as he has acted as As surety.d)No party is responsible for repaying the borrowed amount due to the absence of voluntary consent in appointing the surety.Correct answer is option 'C'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Directions: Read the following passage and answer the question.The term indemnity literally means security against loss. In a contract of indemnity, one party, i.e. the indemnifier, promise to compensate the other party, i.e. the indemnified, against the loss suffered by the other. The English law defines a contract of indemnity as a promise to save a person harmless from the consequences of an act. Thus, it includes within its ambit losses caused not merely by human agency, but also those caused by accident or fire or other natural calamities. As per Section 124 of the Contract Act, a contract of indemnity is that contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person.The definition provided by the Indian Contract Act confines itself to the losses occasioned due to the act of the promisor or due to the act of any other person. Under a contract of indemnity, liability of the promisor arises from loss caused to the promisee by the conduct of the promisor himself, or as per the terms in the indemnity contract. Every contract of insurance, other than life insurance, is a contract of indemnity. The definition is restricted to cases where loss has been caused by some human agency.Section 124 deals with one particular kind of indemnity which arises from a promise made by an indemnifier to save the indemnified from the loss caused to him by the conduct of the indemnifier himself or by the conduct of any other person, but does not deal with those classes of cases where the indemnity arises from loss caused by events or accidents which do not depend upon the conduct of indemnifier or any other person.In a contract of indemnity, there are two parties, i.e. indemnifier and indemnified. A contract of guarantee involves three parties, i.e. creditor, principal debtor and surety. An indemnity is for reimbursement of a loss, while a guarantee is for security of the creditor. In a contract of indemnity, the liability of the indemnifier is primary and arises when the contingent event occurs. In case of contract of guarantee, the liability of surety is secondary and arises when the principal debtor defaults. The indemnifier after performing his part of the promise has no rights against the third party and he can sue the third party only if there is an assignment in his favour. Whereas in a contract of guarantee, the surety steps into the shoes of the creditor on discharge of his liability, and may sue the principal debtor.[Extracted with edits and revision from Contract of Indemnity, article by taxmanagementindia]Q. A borrows funds from B to launch a new business venture, and at Bs insistence, A designates C as a surety. Unfortunately, As business is severely impacted by a market recession, leading to his inability to settle his financial obligations. In response, B initiates legal action against C to recover the outstanding debt from A. Determine the outcome.a)The obligation to settle the debt defaults to As family members.b)B must pursue legal action against A independently to recover the loan.c)C is liable for payment as he has acted as As surety.d)No party is responsible for repaying the borrowed amount due to the absence of voluntary consent in appointing the surety.Correct answer is option 'C'. Can you explain this answer? tests, examples and also practice CLAT tests.