Skip to content
Contract II · Unit 4

Indemnity, Guarantee, Bailment and Agency

Unit 4 of Contract – II (syllabus: Module IV — contracts of indemnity and guarantee, the surety’s liability and discharge, bailment and pledge, and the law of agency — creation, the authority of an agent, the relations of principal, agent and third parties, and termination). Below: what the unit covers, the provisions it turns on, and the cases an examiner expects you to name.

What this unit covers

  • When may an indemnity holder enforce the indemnity?
  • How is a contract of guarantee distinguished from a contract of indemnity?
  • How is a surety discharged?
  • What rights has a surety who has paid?
  • What are the essentials of bailment, and can it exist without a contract?
  • What is the bailee's standard of care and what happens if he keeps the goods too long?
  • What is the difference between a lien and a pledge?
  • How does an agent bind his principal, and what happens if he exceeds his authority?
  • What are the conditions of a valid ratification?
  • When does the termination of an agent's authority take effect?
  • When is an agent personally liable on a contract he makes for his principal?

Treat that list as a self-test: recite each topic's rule from memory before you open its cases.

Provisions

Leading cases

Full case summaries

Exam questions on this unit

In this paper