Project Double Indemnity

LAW OF CONTRACTS - “DOUBLE INDEMNITY”

(Term Paper towards partial fulfilment of the assessment in the  subject of Special Contracts) Contracts)

Submitted by:

Anuj Bahukhandi Roll No. 899 Semester- III  Submitted to:

Prof. Bipin Kumar   Assistant Professor Professor (Law)

Ntio!" L# U!i$e%&ity' (od)*u%

Summer Session (July-Noem!er" #$%#&

Table of Contents

INTRODUCTION............ INTRODUCTION....................... ..................... ..................... ..................... ..................... ..................... ..................... ........................... ................ 3 INDEMNITY............. INDEMNITY........................ ...................... ..................... ..................... ..................... ..................... ..................... ..................... ...................... ........... 4 INSURANCE INSURANCE CONTRACT, CONTRACT, IF CONTRACT CONTRACT OF INDEMNITY................ INDEMNITY...........................................6 ...........................6 ................................ ..................... ..................... ..................... ..................... ................................................... ........................................ 6 INDIA..................... ............................... ..................... ..................... ..................... ..................... ..................... ..................... ......................... .............. 6 ENGLAND.................... RIGHTS OF INDEMNITY HOLDER................ HOLDER........................... ..................... ..................... ..................... ..................... ...................7 ........7 DOUBLE INDEMNITY-AN ANALYSIS........................................................................10 CONCLUSION........ CONCLUSION.................. ..................... ..................... ..................... ..................... ..................................................... ........................................... 23

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INTRODUCTION

'he onep) of *ou!le +ndemni)y as an impor)an) aspe) of )he ,on)ra) of +ndemni)y has no) ye) !een adop)ed and adap)ed !y )he ,our)s in +ndia. As a onseuene of )he lassial onep) of )o physial indiiduals" hain/ eual !ar/ainin/ poer" freely and olun)arily en)erin/ in)o )he on)ra)" on)rol oer )he )erms of )he on)ra) as limi)ed )o )he minimum. +n )he presen) en)ury" )he use of dou!le indemni)y lauses in indemni)y on)ra) has !eome ery ommon and i) is ar/ua!le )ha) a us)omer ho on)ra)s on suh s)andard )erms has  !een imposed on him and does no) really a/ree )o )hem a) all. +ndemni)y a/reemen)s are re/ularly used )o alloa)e risk !e)een par)ies on ons)ru)ion proje)s. Reen)ly" some dou!) has surfaed as )o he)her )he lan/ua/e found in a )ypial indemni)y a/reemen) is suffiien) )o reuire indemni)y in si)ua)ions here )he indemnifyin/ par)y ()he indemni)or& is i)hou) faul).

*ou!le indemni)y ,lauses in +ndemni)y ,on)ra)s0)hese )ypes of on)ra)s are found in our  eeryday parlane and of ourse e for/e) )o no)ie )hem in our day-)o-day life and ho i) /oes on )o affe) our lies. 'hese form of on)ra)s hae !een in e1is)ene sine anien) )imes like ,ons)ru)ion proje)s e)." hih are in e1is)ene een no and has )aken a muh omple1 form een )oday. 2en in )his era of )ehnolo/y and moderni3a)ion )here has opened up arious aenues for )he dou!le indemni)y lauses like in insurane on)ra)s" proje) on)ra)s e). No )he ues)ion arises as )o he)her )here is reasona!ili)y !e)een )o par)ies hen )hey are e1eu)in/ an a/reemen) )hrou/h an indemni)y on)ra) and as suh )he res)ri)ion or e1lusion" refle1ie indemni)y lauses.

'here are learly iden)ifia!le s)eps in )he in)erpre)a)ion of on)ra)s. 4irs)" )he par)ies5 ommon in)en)ion ()ha) hih )hey an)ed )o re/ula)e& is sou/h)6 ne1)" an a))emp) is made )o  !uild up a pi)ure of )he relean) ondi)ions" he)her )hey !e ommon or le/ally reuired ()hose hih" /ien )he irums)anes" )he par)ies ould hae ished )o es)a!lish" on ei)her  ra)ional or le/al /rounds&6 finally" )he jud/e may end up applyin/ le/al proisions far  remoed from )he par)ies5 e1 an)e ommon ill" suh as )he on)ra proferen)em rule" hose  purpose is )o preen) )he use of unin)elli/i!le )erms )hrou/h )he )hrea) of applyin/" in eah

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suh ase" an in)erpre)a)ion in faour" no) of hoeer is responsi!le for rea)in/ suh unin)elli/i!ili)y" !u) of )he o)her par)y.

7pinions differ and in )his re/ard one shool of )hou/h) says )ha) dou!le indemni)y lauses are an adan)a/e hereas i) is a disadan)a/e and i) should !e done aay i)h. 'hey ome )o )his onlusion as !eause a dou!le indemni)y on)ra) is a uniersal on)ra) hain/ or  enumera)in/ )he same se) of )erms and ondi)ions and )he onep) of iarious lia!ili)y omin/ up in ,on)ra)ion ,on)ra)s. No in suh )ype of on)ra)s )he ues)ion )ha) arises is )ha) he)her )he o)her par)y has )ha) same !ar/ainin/ poer or )he freedom of on)ra) as )he )erms and ondi)ions are one sided. As suh )hrou/h )his proje) repor) an a))emp) is !ein/ made )o anser )his !asi pro!lem and )hus reah )o a defini)e end in )he ourse of )his researh.

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INDEMNITY 

,on)ra)s are /enerally onluded !y offer and aep)ane. No aordin/ )o di)ionary meanin/" indemni)y is a pro)e)ion a/ains) loss" esp. in )he form of a promise )o pay" or   paymen) for loss of money" /oods" e). +) is a seuri)y a/ains)" or ompensa)ion for loss e). 4or ins)ane" A on)ra)s )o indemnify B in respe) of a er)ain sum of #$$ Rupees. 'his is a on)ra) of indemni)y. +n a on)ra) of indemni)y" )he person ho promises )o indemnify is knon as indemnifier" and )he person in hose faour suh a promise is made is knon as indemnified or indemni)y holder.

Aordin/ )o Se)ion %#: of )he +ndian ,on)ra) A)" a on)ra) of indemni)y means a on)ra) !y hih one par)y promises )o sae )he o)her from loss aused )o him !y )he on)ra) of )he promisor himself" or !y )he ondu) of any o)her person. 'his proision inorpora)es a on)ra) here one par)y promises )o sae )he o)her from loss hih may !e aused" ei)her  (i&

By )he ondu) of )he promisor himself" or"

(ii&

By )he ondu) of any o)her person.

'his defini)ion oers indemni)y for loss aused !y human a/eny only. +) does no) deal i)h )hose lasses of ases here )he indemni)y arises from loss aused !y een)s or aiden)s" hih do no) or may no) depend upon )he ondu) of )he indemnifier or any o)her person" or   !y )he reason of lia!ili)y inurred !y some)hin/ done !y )he indemnified a) )he reues) of )he indemnifier. +n fa)" hoeer )here are )o )ypes of indemni)y lauses- )hey are )he refle1ie indemni)y lause and )he insurane indemni)y lause. ;here )he former indemni)y reuires B ho has suessfully sued his fello-!u) defaul)in/0on)ra)in/ par)y A )o indemnify A. suh lauses orrespond ery muh )o