Indemnity - Law of Contracts II - Notes

• Indemnity (English Law) - Promise to save a person harmless from the consequences of an act.
• It could be express or implied. - Secretary of State v. Bank of India Ltd.
• Shefield Corp. v. Barclay - A corporation, having registered a transfer if stock on the request of a banker, was held entitled to recover indemnity from the banker when the transfers were discovered to be forged.
• §124 talks of loss caused by the promisor himself or other person and therefore loss by accident like fire or peril of sea is not covered.  It must be by human agency only. - Gajanan Moreshwar v, Moreshwar Madan
• §124 does not deal with indemnity between principal and agent.
• Persons can only encash indemnity to meet losses suffered. Anything more would be undeserved windfall doe one and penalty for other. - Cargill Intl. v. Bangladesh Sugar & Food Ind. Corp.
• If liability of the indemnity-holder has become absolute then the indemnifier must indemnify the indemnity-holder even if the indemnity-holder hasn't damnified. -Moreshwar v. Moreshwar