What is the primary purpose of a Contract of Indemnity in legal agreements?

To transfer financial liabilities from one party to another

To protect individuals or entities from financial harm under specified circumstances

To eliminate financial consequences in all situations

To create unfair burdens on individuals

In English Law, what does an indemnity represent in relationships like principal-agent or employer-employee relationships?

A promise to shield individuals from the repercussions of certain actions

A way to increase financial liabilities

A form of punishment for misconduct

A method to avoid legal responsibilities

What does a Contract of Indemnity primarily aim to achieve in legal agreements?

Shift all liabilities to the indemnified party

Ensure the indemnified party is compensated for losses

Eliminate the need for legal actions

In the legal concept of Indemnity, what is the significance of shifting liability from one party to another?

It absolves both parties from any responsibility

It ensures equal distribution of losses

It holds one party primarily responsible for liabilities

It limits the indemnified party's rights

How does the Contract of Indemnity under the Indian Contracts Act 1872 protect parties involved in transactions?

By exempting them from legal repercussions

By ensuring equal sharing of losses

By outlining the obligations of the indemnifier to compensate for losses

By transferring ownership rights between parties

What is a distinguishing characteristic of contracts of indemnity compared to contracts of guarantee?

Contracts of indemnity involve only two parties.

Contracts of guarantee involve a primary liability to discharge obligations.

Contracts of indemnity are based on contingencies.

Contracts of indemnity are always insurance contracts.

What does Section 125 of the Indian Contract Act primarily outline regarding the extent of liability in a contract of indemnity?

The promisor's liability is limited if the promisee makes default.

The promisee is not entitled to recover any damages if he makes default.

The promisor is liable regardless of whether the promisee makes default.

The promisee is solely responsible for all damages compelled to be paid.

What principle was illustrated in the case of Geismar v. Sun Alliance and London Insurance Ltd regarding indemnity?

Indemnity can always be claimed regardless of the circumstances.

Indemnity can be claimed for intentional wrongful acts.

Indemnity is limited to specific types of contracts.

Indemnity cannot be claimed for consequences of an intentional wrongful act.

In which case was the plaintiff compensated for following the defendant's instructions and suffering a loss as a result?

Khetarpal Amarnath v. Madhukar Pictures

Geismar v. Sun Alliance and London Insurance Ltd

Under what circumstance can indemnity not be implied, as per the ruling in Mehrauli v. Sariatulla?

When a person executes a bail bond.

When a person fails to declare items to customs intentionally.

When the indemnity-holder's rights are limited by the provisions of the Act.

When the promisor's orders are contrary to the terms of the contract.

When does the indemnifier become liable to pay according to traditional English Rule?

Once the indemnity holder claims reimbursement

After suffering an injury or loss

As soon as the liability occurs

When does the indemnifier become liable to pay under traditional English Rule?

After the indemnity holder claims reimbursement

Only after an actual loss has been incurred

When the claim is made by the indemnified

When does the indemnity holder recover the promised indemnity according to established case law?

Before the loss becomes absolute

After providing a log book in certain cases

When certain conditions are fulfilled

Once the loss becomes absolute or certain

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