Discuss the law relating to agreements made by a minor in Explains the rules regarding contingent contact

India A contingent contract is a contract that depends on the

Under Section 11 of the Indian Contract Act, 1872, a minor is happening or non-happening of a particular event or condition,
not considered competent to contract. This means that any which is uncertain. Under Section 31 of the Indian Contract
agreement made by a minor is void and cannot be enforced. Act, 1872, a contingent contract is defined as one where the
The age of majority in India is 18 years, unless the minor is a performance of the contract is dependent on the occurrence of
ward of the government, in which case it is 21 years. an event
Void Contracts: Contracts entered into by a minor are void as Conditional Performance: A contingent contract can only be
initio (from the outset) and cannot be enforced by the other performed if the specified event happens. If the event does not
party. occur, the contract is not enforceable.
Exceptions: A minor can enter into contracts for necessaries Uncertainty of the Event: The event must be uncertain, i.e., it
(like food, clothing, education). These contracts are valid, and may or may not happen. It can be a future event but cannot be
the minor is liable to pay for the necessaries supplied. one that is already certain or has already happened.
Beneficial Contracts: Contracts that benefit a minor, like those Legal Requirement for the Event: The event must be legal and
of employment or apprenticeship, may be enforceable. not against public policy or law. If the event involves an illegal
act, the contract is void.
Misrepresentation of Age: Even if a minor misrepresents their
Time of Performance: The performance of a contingent
age, the contract remains void, and they cannot be held liable
contract is linked to the event's occurrence within a reasonable
for misrepresentation. time. If the event is delayed unnecessarily, the contract may
Guardian's Role: A contract made by a minor’s guardian on become void due to frustration.
their behalf may be enforceable if it benefits the minor. Contracts Based on Impossible Events: If the event is
impossible to occur (like an act that is physically or legally
Duties, Powers, and Functions of IRDA impossible), the contingent contract is void.
The Insurance Regulatory and Development Authority (IRDA) of
India, established by the IRDA Act, 1999, plays a critical role in what are the essential elements of promissory note
regulating and promoting the insurance industry. A promissory note is a written promise made by one party (the
Duties: Regulation of the Insurance Sector: Ensures that maker) to pay a certain sum of money to another party (the
insurance companies operate fairly, transparently, and in the best payee) on demand or at a specified future date. Under Section
interests of consumers. 4 of the Negotiable Instruments Act, 1881, the following are the
Promoting Competition: Encourages competition among essential elements of a valid promissory note:
insurers to enhance services and lower costs for consumers. In Writing: The note must be written; it cannot be oral. It must
Protecting Policyholders: Safeguards the interests of be signed by the maker.
policyholders by ensuring timely claims settlement and
Unconditional Promise: The note must contain an unconditional
transparency.
promise to pay a specific sum of money. It cannot be
Financial Stability: Maintains the financial health of the
insurance sector, promoting sustainable growth. contingent upon any other event or condition.
Functions: Regulating Insurance Business: Sets guidelines for Clear Mention of the Amount: The sum of money to be paid
insurance companies and intermediaries to ensure fair conduct. must be certain and clearly stated. This amount must be
Approval of Products: Ensures that insurance products are specific, not vague or variable.
aligned with legal and consumer welfare standards. Signature of the Maker: The promissory note must be signed by
Promoting Insurance Awareness: Works on educating the public the person who is making the promise to pay, i.e., the maker.
about the significance of insurance and policyholder rights This makes the note binding and enforceable.
Grievance Redressal: Provides mechanisms for resolving Payable to a Specific Person or Bearer: The note must be
disputes between policyholders and insurers. payable either to a specific person or to the bearer of the note.
It may also be payable to order (i.e., the payee can transfer the
Discuss the essentials of a valid contract right to someone else).
A contract is an agreement that is legally enforceable. For a
contract to be valid under Indian Contract Act, 1872, certain Explain the rules regarding delivery of goods
essential elements must be present Mode of Delivery: Delivery can be made in various forms, such
Offer and Acceptance: There must be a clear and unequivocal as actual delivery (physically handing over the goods),
offer made by one party, and the offer must be accepted by the constructive delivery (transferring ownership or control of
other party. Both the offer and the acceptance must be free and goods without physically handing them over), or symbolic
voluntary. delivery (e.g., handing over the keys to a warehouse containing
Intention to Create Legal Relations: The parties involved goods).
must intend to create a legal relationship. Social or domestic Delivery of Goods According to the Contract: The delivery
agreements (e.g., promises between family members) are must be made in the manner and time specified in the contract.
generally not considered valid contracts unless there is an If no specific terms are mentioned, the delivery must be made
intention to create legal obligations. within a reasonable time, considering the nature of the goods
Lawful Consideration: A valid contract requires consideration, and circumstances.
which means something of value must be exchanged between Delivery at the Seller’s Risk: If the delivery is to be made at
the parties. This could be money, goods, services, or even a the seller’s place of business or location, it is considered
promise. However, the consideration must be lawful. delivery at the seller’s risk. This means the seller is responsible
Capacity to Contract: The parties involved in the contract must for the goods until they are delivered to the buyer.
be competent to contract. They should be of legal age (18 years Delivery at the Buyer’s Risk: If the goods are being delivered
or older), of sound mind, and not disqualified by law from at the buyer’s location, or if the buyer takes delivery from the
entering into a contract (e.g., minors, persons of unsound mind). seller’s premises, it is considered
delivery at the buyer’s risk. From the moment the goods are
delivered, the buyer assumes responsibility for them.
Delivery by Third Party:Delivery can be made by a third
party (such as a carrier), but the risk passes to the buyer once
the goods are delivered to the carrier unless otherwise agreed
upon by the parties.
How a surety can be discharged What the right and obligation of finder goods
A surety can be discharged from their obligations through The finder of goods holds certain rights and obligations under
several key circumstances. First, if the primary debtor fulfils common law. Regarding rights, the finder has the right to
their obligation, the surety is automatically relieved of any possession of the goods, meaning they can temporarily hold
responsibility. Additionally, if the creditor voluntarily releases the items until the rightful owner is found. If the owner doesn’t
the surety from their liability or alters the terms of the contract come forward, the finder may eventually gain ownership,
without the surety’s consent, the surety is discharged. The depending on local laws. Additionally, the finder may be
expiration of a specified term or duration in the contract can entitled to a reward if the goods were lost in a public place,
also discharge the surety once the agreed period is over. especially if efforts have been made to return them to the
Another way a surety can be discharged is through novation, owner. However, the finder also has important obligations.
where a new contract is created between the creditor and the They must take reasonable care of the goods to prevent
debtor, releasing the surety from the original agreement. damage or loss while they are in possession. If the goods were
Lastly, if performance of the contract becomes impossible due found in a public place, the finder is obligated to inform the
to unforeseen events, such as the destruction of the subject authorities, such as the police, to facilitate the return to the
matter or the death of the debtor, the surety is discharged rightful owner. The finder is also required to make reasonable
from further obligations. These conditions ensure that the efforts to locate the owner and return the goods. Furthermore,
surety is relieved from liability when specific legal requirements they cannot use, sell, or keep the goods for personal use unless
are met. the goods remain unclaimed after a certain period. Failure to
fulfil these obligations could result in the finder being liable for
Explain the nature and causes of air pollution theft or conversion. Therefore, while the finder enjoys certain
Air pollution refers to the presence of harmful substances in rights, their responsibilities ensure the goods are cared for and
the air, which can negatively affect human health, ecosystems, returned to their rightful owner.
and the environment. The nature of air pollution involves the
release of pollutants, both natural and man-made, into the What are the remedies of breach of contract
atmosphere, leading to a degradation of air quality. When a contract is breached, the injured party has several
Vehicle Emissions: Cars, trucks, and other transportation remedies to seek resolution and compensation for their losses.
sources contribute significantly to air pollution, especially in The most common remedy is the award of damages, which are
urban areas. Exhaust gases from internal combustion engines monetary compensation meant to cover the loss caused by the
release pollutants like carbon monoxide, nitrogen oxides, and breach. There are different types of damages, such as
hydrocarbons. compensatory damages for direct losses, consequential
Agricultural Activities: The use of fertilizers and pesticides in damages for indirect or foreseeable losses, and in rare cases,
farming, as well as livestock farming, generates methane and punitive damages to punish egregious behaviour. Another
ammonia, which contribute to air pollution. remedy is specific performance, which compels the breaching
Deforestation: The clearing of forests for agriculture or urban party to fulfil their contractual obligations, often used in cases
development leads to increased dust and particulate matter in the involving unique items or property where monetary
atmosphere, as well as reduced oxygen production, worsening compensation is inadequate. In some situations, an injunction
air quality. may be sought, which is a court order requiring the breaching
Natural Causes: Natural events such as wildfires, volcanic party to stop certain actions or to take specific actions to prevent
eruptions, and dust storms also release pollutants into the air. further harm. If the breach is severe enough, the injured party
For example, wildfires produce smoke and particulate matter, may opt for rescission, which cancels the contract and returns
while volcanic eruptions release sulphur dioxide and ash. both parties to their original positions before the contract was
formed. In cases of contract errors or unclear terms,
Enumerate the implied conditions in the sales of goods act reformation may be used to modify the contract to reflect the
Under the Sale of Goods Act, several conditions are implied in true intentions of both parties. These remedies aim to either
contracts for the sale of goods to protect both buyers and compensate for losses, enforce the contract, or undo the breach,
sellers. One of the key implied conditions is the condition as to depending on the nature of the situation.
title, which ensures that the seller has the right to sell the
goods and that they are free from any undisclosed Define unfair trade practice
encumbrances. Another important implied condition is the unfair trade practice refers to any deceptive, fraudulent, or
condition as to description, which mandates that if goods are unethical business practice that is intended to mislead consumers
sold by description, they must conform to that description. For or gain an unfair advantage in the market. These practices
example, if goods are described as "new," they must meet that violate the principles of fair competition and can harm
standard. The condition as to quality or fitness implies that the consumers, competitors, or the integrity of the market as a
goods must be of satisfactory quality, taking into account whole. Unfair trade practices include activities such as false
factors such as price and description, and fit for the purpose for advertising, misleading labeling, misrepresentation of goods or
services, bait-and-switch tactics, and fraudulent pricing
which the buyer intends to use them. Additionally, in sales by
schemes. Essentially, it involves any action that manipulates or
sample, the condition as to sale by sample requires that the
deceives consumers into making decisions based on inaccurate
goods must correspond with the sample provided in terms of or incomplete information, often for the financial benefit of the
quality and characteristics. Lastly, the condition of business. Such practices are often regulated by consumer
merchantability ensures that the goods are fit for normal use protection laws to ensure fairness in trade and to protect
and free from defects. These implied conditions ensure that consumers from exploitation or harm.
buyers receive goods that meet certain quality standards and
protect them from unfair transactions.
What are the essential of a valid consideration Explain the principle of quantum meruit
Lawful: The consideration must be legal and not against public The principle of quantum meruit is a legal concept that ensures
policy. It cannot involve illegal activities or immoral actions. a person is compensated fairly for work or services provided
For example, a promise to pay for an illegal service is not valid. when there is no express agreement or when a contract is
Sufficient but Not Necessarily Adequate: The consideration unenforceable or incomplete. The term, which means "as much
must have some value in the eyes of the law, though it does not as he has deserved" in Latin, applies in situations where one
need to be equal or equivalent to the value of the promise made. party performs services or delivers goods, but the contract does
A contract can still be valid even if one party is giving not specify a price, or the contract is void or partially performed.
something less valuable than what they are receiving, as long as It allows the performing party to claim a reasonable amount for
there is something of value exchanged. their efforts, even if the full contract was not executed. This
Mutual: Both parties must provide consideration for the principle can be invoked when a contract is not fully completed,
contract to be enforceable. This means each party must offer or if it is canceled by one party, ensuring that the party who has
something of value in exchange for the other party’s promise or already rendered services or performed work is compensated
performance. A one-sided promise without consideration from based on the value of what has been done. Essentially, quantum
both sides is not valid. meruit ensures fairness by determining a fair and reasonable
Not Past: Consideration must be given in exchange for the payment for services or goods rendered, even in the absence of a
promise made. A promise or act that has already been completed formal, enforceable agreement.
cannot form the basis of consideration. In other words, the
consideration must be future or contemporaneous to the What is the element of marine insurance
promise. Insurable Interest: For a marine insurance policy to be valid,
Capable of Being Converted into a Value: The consideration the insured must have an insurable interest in the subject
must be something that can be measured in terms of value, matter of the insurance. This means that the insured must
whether it be money, goods, services, or a promise to do stand to suffer a financial loss if the insured property (such as a
something. ship or cargo) is damaged or lost. Without insurable interest,
the contract is void.
Write a note on pollution control measures Utmost Good Faith (Uberrimae Fidei): Marine insurance
Regulation and Enforcement: Governments play a crucial role
contracts are based on the principle of utmost good faith,
by setting environmental regulations and standards to control
meaning that both parties—insurer and insured—must disclose
pollution. This includes limits on emissions of harmful
substances, waste management guidelines, and penalties for all material facts honestly and fully
non-compliance. Environmental agencies monitor and enforce Perils of the Sea: Marine insurance covers specific perils of the
these regulations to ensure industries adhere to the rules. sea, which refer to risks that may occur during a sea voyage.
Adoption of Clean Technologies: Industries can adopt cleaner These perils include natural risks like storms, shipwrecks, or
and more efficient technologies that reduce the production of damage from the sea. However, the policy may also cover other
pollutants. For example, using renewable energy sources like risks, depending on the type of coverage, such as fire, theft, or
wind, solar, and hydroelectric power reduces air pollution piracy.
caused by burning fossil fuels. Additionally, the development of Policy Terms: Marine insurance policies are governed by
technologies such as cleaner manufacturing processes, specific terms and conditions that define the scope of
wastewater treatment plants, and air filtration systems helps coverage. These terms include the premium (the amount paid
minimize environmental damage. for the policy), the sum insured (the maximum amount the
Waste Management and Recycling: Proper waste management insurer will pay in case of a loss), and the duration of the
is essential to control pollution. This involves the segregation, policy..
treatment, recycling, and safe disposal of waste. Reducing the Contribution: In case of multiple insurance policies covering the
amount of waste sent to landfills through recycling and reusing
same subject matter, the principle of contribution applies. This
materials can significantly decrease pollution, particularly in the
means that if there is a loss, the insurers will share the liability
case of plastic and industrial waste.
Green Spaces and Urban Planning: The creation of green based on the proportion of coverage provided.
spaces, such as parks and urban forests, can help absorb air
pollutants, mitigate heat island effects, and improve overall air
quality. Who are the parties to a negotiable instrument
Drawer: The person who creates and signs the negotiable
Explain the objective of central consumer protection council instrument (such as a check, promissory note, or bill of
Promoting Consumer Awareness: One of the main objectives exchange). The drawer orders the payment of a specified sum of
of the CCPC is to create awareness among consumers about money.
their rights and responsibilities. This involves educating the Drawee: The person or entity on whom the instrument is drawn
public about issues such as unfair trade practices, deceptive and who is ordered to pay. For example, in the case of a check,
advertising, and the importance of making informed decisions the drawee is the bank or financial institution.
when purchasing goods and services. Payee: The person or entity to whom the money is payable. The
Advising the Government: The CCPC advises the central payee is the one who receives the payment as directed by the
government on matters related to consumer protection. This negotiable instrument.
includes suggesting measures to improve consumer protection Endorser (if applicable): If the negotiable instrument is
laws, enhancing consumer welfare programs, and endorsed, the person who signs it over to another party
recommending reforms to the existing legal framework to better (transferor). The endorser typically guarantees the payment of
address emerging challenges. the instrument to the new holder.
Improving Consumer Welfare: The Council aims to ensure Endorsee (if applicable): The person to whom the negotiable
that consumers' interests are safeguarded by promoting fair trade instrument is endorsed, receiving the rights to collect the
practices, protecting consumers from exploitation, and ensuring payment.
that businesses adhere to ethical standards in providing goods
and services.
Addressing Grievances: The CCPC plays a role in resolving
consumer complaints and promoting the establishment of
consumer grievance redressed mechanisms. It works in
conjunction with state and district-level consumer forums and
commissions to provide accessible channels for consumers to
resolve disputes.
Discuss the various implied warranties Briefly explain different kinds of offers
Implied warranties in negotiable instruments are automatic Express Offer: An offer made clearly and directly, either orally
guarantees made by parties involved in the creation, transfer, or or in writing, where the terms are stated explicitly. Example: A
endorsement of the instrument. These warranties ensure the seller offers to sell a product at a specific price.
validity and authenticity of the instrument, protecting the parties Implied Offer: An offer that is inferred from the conduct or
involved. Key implied warranties include the warranty of title, actions of a person, rather than being stated outright. Example:
where the transferor guarantees they have the right to transfer A person orders food at a restaurant, implying an offer
the instrument and that it is not counterfeit or altered; the
General Offer: An offer made to the public at large, without
warranty of no defences, ensuring there are no legal defences
specifying any particular person. It is open to anyone who
(such as fraud or duress) that would prevent payment; the
warranty of authenticity, confirming the instrument is genuine accepts the terms. Example: A reward offer for finding a lost
and the signatures are not forged; the warranty of solvency, item.
which assures the instrument is not affected by insolvency Specific Offer: An offer made to a specific person or group. It is
claims; and the warranty of no prior dishonor, indicating the only valid for the person to whom it is addressed. Example: A
instrument has not been dishonored before. These warranties job offer made to an individual by a company.
provide a legal framework to ensure that negotiable instruments Cross Offer: Occurs when two parties make identical offers to
are transferred smoothly, securely, and enforceably. each other, without knowing the other’s offer, leading to a
situation where neither offer is accepted. Example: Two
What are the principle of marine insurance companies offering to buy a product from each other without
Utmost Good Faith (Uberrimae Fidei): Both parties (the knowing the other’s proposal.
insurer and the insured) must disclose all material facts
truthfully. Non-disclosure of important information can result in State the right of consumer protection act 1986
the invalidation of the policy or rejection of claims. Right to Safety: Consumers have the right to be protected
Insurable Interest: The insured must have a financial interest against goods and services that are hazardous to health or life.
in the property being insured. Without an insurable interest, the They are entitled to products that meet safety standards and
insurance contract is void.
are free from defects.
Indemnity: The purpose of marine insurance is to restore the
Right to be Informed: Consumers have the right to be given
insured to the same financial position they were in before the
loss, not to allow for profit. Compensation is based on the value accurate and adequate information about products and
of the actual loss. services to make informed choices. This includes clear labeling,
Proximate Cause: The insurer is only liable for losses caused warnings, and detailed descriptions of the product.
by risks that are specifically covered in the policy. The cause of Right to Choose: Consumers have the right to access a variety
the loss must be directly related to the insured event. of goods and services at competitive prices. They should not be
Subrogation: After compensating the insured for a loss, the forced to buy from a limited selection of sellers.
insurer has the right to take legal action against a third party Right to be Heard: Consumers have the right to voice their
responsible for the loss. This helps the insurer recover the concerns and complaints about a product or service. They are
amount paid to the insured. entitled to have their complaints addressed in an efficient
manner, often through consumer forums or grievance redressal
mechanisms.
What are the method of pollution control Right to Redressal: If a consumer faces any harm or
Emission Control (Air Pollution): This includes the use of dissatisfaction due to defective goods or services, they have the
scrubbers, filters, and electrostatic precipitators to remove right to seek compensation or a remedy, including repair,
harmful particles and gases from industrial emissions. replacement, or refund.
Additionally, using cleaner fuels and installing catalytic
converters in vehicles helps reduce air pollution. What are the rules regarding minors agreement
Wastewater Treatment (Water Pollution): Water pollution is Voidable Contract: Under Indian Contract Act, 1872, a contract
controlled by using physical, chemical, and biological treatment entered into by a minor (someone below 18 years of age) is
methods in wastewater treatment plants. Techniques like voidable at the minor's discretion. This means the minor can
sedimentation, filtration, chemical coagulation, and biological choose to either disaffirm (reject) the contract or choose to
treatment (e.g., activated sludge) help remove contaminants honor it, but the other party cannot enforce it against the
from water. minor.
Recycling and Waste Management (Solid Waste Pollution): No Legal Binding: A minor’s agreement is not legally binding on
Recycling materials like plastics, paper, and metals reduce the the minor. The contract does not create any legal obligation on
amount of waste in landfills. Proper waste segregation, the minor, and they are not held responsible for fulfilling the
composting, and incineration are other methods to handle solid contract terms.
waste effectively and reduce environmental harm Exceptions to Voidability:Beneficial Contracts: If a minor enters
Use of Green Technology (Sustainable Practices): into a contract that benefits them, such as a contract for
Implementing renewable energy sources like solar and wind education or apprenticeship, it may be enforceable under
power, and using eco-friendly products, help reduce pollution. certain circumstances.
Green building practices, energy-efficient appliances, and No Capacity to Contract: A minor cannot enter into valid
sustainable agriculture also play a significant role in minimizing contracts except in the above exceptions. Any contract made
pollution. by a minor involving non-necessary goods or services is deemed
Legislation and Policy Enforcement: Governments enact laws void.
and regulations to control pollution, such as setting emissions Ratification After Majority: If a minor enters into a contract and
limits, enforcing waste disposal protocols, and monitoring later attains the age of majority (18 years), they can ratify the
environmental standards. Examples include the Clean Air Act, contract by confirming their intention to continue with the
Clean Water Act, and policies aimed at reducing plastic use. contract. Otherwise, it remains void

.
What are essential element of valid contract Distinguish between express contract and implied contract
Offer and Acceptance: There must be a clear offer made by one Express Contract is one where the terms and conditions are
party and a corresponding acceptance by the other party. The clearly stated and agreed upon by the parties, either orally or in
offer and acceptance must be communicated, and the acceptance writing. In this type of contract, both parties explicitly
must be in the terms of the offer. communicate their intentions and obligations, leaving no room
Intention to Create Legal Relations: Both parties must intend to for ambiguity. For example, if a person hires a contractor to
enter into a legally binding agreement. Social or domestic renovate their house and they sign a written agreement detailing
agreements (like family promises) are typically not considered the scope of work, timelines, and payment terms, it is an express
legally enforceable. contract. The essential feature is that the agreement is openly
Lawful Consideration: A valid contract must involve a lawful declared and agreed to by both parties.
consideration (something of value) being exchanged between Implied Contract, on the other hand, is formed by the actions
the parties. This could be money, goods, services, or a promise or conduct of the parties, rather than through explicit verbal or
to act or refrain from acting. written agreements. The terms of the contract are inferred from
Capacity to Contract: The parties entering into the contract must the circumstances, such as the behavior or the relationship
have the legal capacity to do so. This means they must be of between the parties. For instance, when you visit a restaurant,
sound mind, of the required age (18 or above in most cases), and you don’t explicitly agree on the terms of payment, but it is
not disqualified by law from contracting. understood that you will pay for the meal once consumed. The
Free Consent: Both parties must give their consent freely and contract is implied based on the actions and expectations of both
voluntarily. The consent should not be obtained through parties.
coercion, undue influence, misrepresentation, or fraud.
Explain principle of insurance with example
Utmost Good Faith (Uberrimae Fidei):
State the difference between nomination and assignment This principle requires both the insurer and the insured to act in
Nomination refers to the act of designating a person to receive a good faith and disclose all material facts. Any misrepresentation
benefit or be entrusted with certain rights, duties, or obligations or non-disclosure of important information can lead to the
under a contract. It does not transfer ownership or legal rights voiding of the insurance contract.
but rather identifies a person who will benefit from or be Example: If a person applies for life insurance but fails to
involved in the arrangement. For example, in a life insurance disclose a pre-existing health condition, the insurance company
policy, a policyholder may nominate a beneficiary to receive the can refuse to pay out a claim if the person passes away due to
insurance payout upon their death. Nomination is typically that condition.
revocable and can be altered by the person who made the Insurable Interest:
nomination at any time. The insured must have a financial interest in the property or life
assignment refers to the transfer of rights, interests, or benefits being insured. If the insured suffers a loss, they should face a
in a contract or property from one party (the assignor) to another financial setback, which is the basis for the insurance policy.
(the assignee). Unlike nomination, assignment involves the Example: A person insures their car because they have a
actual transfer of ownership or legal rights, making the assignee financial stake in it. If the car is damaged or stolen, they would
responsible for the rights and obligations in the agreement. For suffer a financial loss, making them eligible for a claim.
instance, a tenant may assign their lease to another person, Indemnity:
transferring the rights and responsibilities of the lease. Once an The insurer will compensate the insured for their loss but not
assignment is made, it is generally irrevocable, and the assignee more than the actual financial loss suffered. The aim is to restore
assumes all legal responsibilities associated with the contract or the insured to the same financial position they were in before the
property. loss, without providing a profit.
Example: If a person’s car is involved in an accident, the
Distinguish between pledge and bailment insurance will pay for the repairs, but only up to the actual value
Pledge refers to the act of transferring goods or property as of the vehicle, not exceeding the insured amount.
security for a debt or obligation. In a pledge, the goods are Subrogation:
delivered to the lender or creditor (the pledgee) by the borrower After compensating the insured, the insurer has the right to
or debtor (the pledgor) as collateral until the debt is repaid. If the pursue any third party responsible for the loss to recover the
debtor fails to repay, the pledgee has the right to sell the pledged amount paid to the insured.
goods to recover the debt. For example, when someone borrows Example: If a person’s house is damaged due to a neighbor's
money from a bank and offers their jewelry as security, that is a negligence, the insurance company may pay for the repairs and
pledge. The main purpose of a pledge is to provide security for a then seek compensation from the neighbor
loan or debt.
Bailment, on the other hand, involves the temporary transfer of Explain the right and duties of an agent.
goods or property from the owner (the bailor) to another person Entitled to be paid for the services rendered according to the
(the bailee) for a specific purpose, such as storage, repair, or terms of the agreement. The agent also has the right to be
safekeeping, without transferring ownership. The bailee is indemnified, meaning they can be reimbursed by the principal
obligated to return the goods or dispose of them according to the for any costs or expenses incurred while carrying out their
terms agreed upon. For example, when you leave your car with a duties. Additionally, the agent has the right to retain
mechanic for repairs, you are engaging in a bailment. Unlike a possession of the principal’s property or goods until any
pledge, bailment does not involve securing a debt and the goods outstanding payments or expenses are cleared, and they may
are not intended to be used as collateral. have a right to a lien over the property until the debt is settled.
Finally, the agent has the right to act in the best interest of the
principal, ensuring that their actions are always aligned with the
principal’s best interests.
Agent also has important duties to perform. These include the
duty of loyalty and good faith, where the agent must act
honestly and put the principal's interests ahead of their own. The
agent has a duty to follow instructions given by the principal,
as long as they are legal and reasonable. The duty of care and
skill requires the agent to carry out their tasks with the
appropriate level of expertise and attention to detail.
Furthermore, the agent has the duty to keep accurate accounts
of all transactions