When the creditorcom pounds with the principal debtor When the creditor agrees not to sue the

principal debtor Where the creditor, by his act or failure to perform his duty to the surety impairs the remedy available to the surety against

the principal debtor, the surety is discharged. When the creditor which by implication releases the principal debtor from liability, will discharge the surety from his liability Where the creditor loses or disposes off, without the consentof the surety any security pledged with him

By Invalidation of Contract
A guarantee obtained by means of either misrepresentation or concealment of material fact which the creditor was aware of, at the time of entering into the contract, invalidates the guarantee Where there is no consideration between the creditor and the principal debtor, the surety is discharged. Where a person gives guarantee on the condition that the creditor shall not act upon it until another person joins in as co-surety, the guarantee is not valid if that other person does not join.

Bank Guarantee
A bank guarantee is a guarantee given by a

bank to a third person, usually a creditor, to pay him a certain sum of money on behalf of the banks customer, when the customer fails to fulfill any contractual or legal obligations towards the third person. A bank guarantee is a contract involvingtwo parties i.e. the bank and the creditor. The bank guarantee is independent of the main contract Bank guarantees are made for specific time, within which they can be enforced

Contract of Indemnity
A contract of indemnity is a 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 person who promises or makes good the loss is called theindemnifier (promisor) The person whose loss is to be made good is called the indemnified or indemnity holder(promisee)

Other features
Indemnity is not given by repayment after payment.

Indemnity requires that the party to be indemnified shall never be called upon to pay. Certain Rights of indemnity holder to ask for damages, costs or any other sums paid in terms of the compromise

Letters of credit
International commercial transactions The device used by the Bankers to effect payment is called theBankers
Commercial Credit or Letter of

Credit

It is a predetermined amount of money, from the issuing bank, its branches, or other associated banks or agencies on complying with specific requirements.

ch 2 contract of indemnity and contract of guarantee

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Characters: ... pontinleft a comment this ppt is avery useful one thanks a lot to Mr. Sengunthar 03 / 14 / 2009 Reply Upload a Document Search Documents

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