In a Contract of Indemnity there are only 2 parties to a contract of indemnity, The Indemnifier and the Indemnified. In a Contract of Guarantee there are 3 parties to a contract of guarantee, The Surety, Creditor and the Principal Debtor.
In a Contract of Indemnity, Indemnity envisages a compensation or reimbursement of losses. In a Contract of Guarantee, Guarantee envisages a situation where security is given to the Creditor that either the principal debtor will complete his obligations or the guarantor shall complete the obligation or compensate the creditor. In a Contract of Indemnity the Indemnifier himself is liable on the happening of an event. In a Contract of Guarantee liability of the Surety arises only when the Principal Debtor defaults.
In a Contract of Indemnity Indemnifier's liability is primary. In a Contract of Guarantee liability of a Surety is secondary In a Contract of Indemnity Indemnifier has no rights against a third party after performing obligations. His rights against a third party can arise only if such a right is assigned to him by the Indemnified in his favour. In a Contract of Guarantee once the Surety discharges the liability of the Principal Debtor he steps into the shoe of the creditor and can sue the principal debtor.
Nature and Meaning of Contract of Indemnity.
What is Quasi Contracts?
In a Contract of Indemnity, Indemnity envisages a compensation or reimbursement of losses. In a Contract of Guarantee, Guarantee envisages a situation where security is given to the Creditor that either the principal debtor will complete his obligations or the guarantor shall complete the obligation or compensate the creditor. In a Contract of Indemnity the Indemnifier himself is liable on the happening of an event. In a Contract of Guarantee liability of the Surety arises only when the Principal Debtor defaults.
In a Contract of Indemnity Indemnifier's liability is primary. In a Contract of Guarantee liability of a Surety is secondary In a Contract of Indemnity Indemnifier has no rights against a third party after performing obligations. His rights against a third party can arise only if such a right is assigned to him by the Indemnified in his favour. In a Contract of Guarantee once the Surety discharges the liability of the Principal Debtor he steps into the shoe of the creditor and can sue the principal debtor.
Nature and Meaning of Contract of Indemnity.
What is Quasi Contracts?
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Difference between Contract of Indemnity and Contract of Guarantee
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