Decide: Principle: The promisee in a contract of indemnity, acting within the scope of his authority, is entitled to recover from the promisor all damages and costs which he may be compelled to pay in a suit. Explanation: Promisor shall not be liable, if the promisee suffers damage owning to circumstance which do not come within the scope of contract of indemnity. Facts: X hired Y for transport services. Transportation contract indemnified Y of any losses made to the consignment in transit. Y’s driver Z was fined on his way for drunken driving. Y claimed the amount of fine alongwith damages from X. Decide whether X is liable to indemnify Y? (a) Yes, as Z was acting within the scope of employment which was duly indemnified. (b) No, as fines are never covered under indemnity clauses. (c) No, as drunken driving amounts to an act of negligence and violation of law which was not covered under indemnity clause. (d) Yes, as Y and Z were acting for the benefit of X.
Posted on: Sat, 15 Mar 2014 05:25:12 +0000
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