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Questions and Answers
What is the nature of indemnity in contractual agreements?
What is the nature of indemnity in contractual agreements?
- It involves three parties in a loan agreement.
- It compensates for damage or loss. (correct)
- It is a verbal agreement without any written contract.
- It protects against loss due to theft only.
Which of the following best describes a pledge?
Which of the following best describes a pledge?
- An agreement to transfer goods permanently.
- A loan without collateral.
- A security given for a loan. (correct)
- A promise to pay a debt in currency.
What is required for a contract of sale of goods to be valid?
What is required for a contract of sale of goods to be valid?
- Goods must be returned to the seller after purchase.
- Only one party must be involved.
- The property in goods must be transferred for a price. (correct)
- The goods and payment must be in different currencies.
What defines a condition in a contract?
What defines a condition in a contract?
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What is the difference between a sale and an agreement to sell?
What is the difference between a sale and an agreement to sell?
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What are warranties in a sales contract?
What are warranties in a sales contract?
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What does 'performance of the contract of sale' entail?
What does 'performance of the contract of sale' entail?
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How does transfer of ownership occur in a sale?
How does transfer of ownership occur in a sale?
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Study Notes
Special Contract
- Indemnity: A contractual agreement where one party agrees to compensate another party for damages or losses.
- Guarantee: An agreement involving three parties: principal debtor, creditor, and surety. The surety promises to pay the debt if the principal debtor defaults.
- Bailment: The delivery of goods by one person (bailor) to another (bailee) for a specific purpose. Upon completion, the goods are returned or disposed of according to the bailor's instructions.
- Pledge: A contract where someone (pledgor) provides an asset as security for a loan. The lender (pledgee) holds the asset until the debt is repaid.
- Contract of Sale of Goods: An agreement where a seller transfers or agrees to transfer ownership of goods to a buyer for a price.
- The buyer and seller are the two parties involved.
- The goods are the subject of the contract.
- The goods must be transferred from seller to buyer.
- Payment is made in the legal currency of the country.
- Condition: A fundamental requirement in a contract. It must be fulfilled before other actions in the contract can take place.
- Warranty: A seller's written promise to repair or replace a product if it has defects. Warranties are additional commitments to a sale and are promises made by the seller.
- Transfer of Ownership:
- In a sale, ownership transfers to the buyer immediately.
- In an agreement to sell, ownership transfers to the buyer at a future date.
- The transfer of ownership depends on things like:
- Are the goods in a deliverable state?
- Are the goods not in a deliverable state?
- Has the price been determined?
- Performance of the Contract of Sale: It refers to the process of delivery and acceptance of goods by the buyer, and the payment by the buyer.
- The seller must be prepared to deliver the goods to the buyer in exchange for payment.
- The buyer must be ready to pay the price in exchange for receiving the goods.
- Performance can be absolute or conditional.
- This applies to both sales and agreements to sell.
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