Book Title: Foundations of Indian Contract Law

Publisher: Oxford University Press

Abstract: This chapter provides an overview on indemnity and guarantee. It notes that the Indian Contract Act 1872 (‘the Contract Act’) contains two provisions defining the nature of a contract of indemnity and the rights of the promisee under it, and that these are immediately followed by twenty-two provisions on guarantees. Sections 124 and 125 of the Contract Act address actions against the indemnified party, with the principal concern being with promises to indemnify against claims by, or liabilities to, third parties. Meanwhile, section 126 defines a guarantee as a contract to perform the promise, or discharge the liability, of a third person in case of his default. The chapter considers the several observations about the reforms proposed by the Law Commission of India in its Thirteenth Report.