Pledges and Pawn Essay Sample

DEFINATION:
The bailment of goods as security for payment of a debt or public presentation of a promise is called Pledge or Pawn. The bailor in this instance is called the. Pledgor or. the pawnor. The bailee is called the Pledgee or the Pawnee. -Sec. 172.

DIFFERENCE BETWEEN PLEDGE AND BAILMENT
Pledge is a peculiar sort of bailment. The difference between Pledge and other sorts of bailment prevarications in the intent or aim of the dealing. The intent of a pledge is to supply security for a debt or the public presentation of a promise. In other sorts of bailment there are other intents for illustration. fix. safe-custody etc. The pledgor and the pledgee have certain particular rights and responsibilities. PLEDGE| BAILMENT|

* PURPOSEThe goods are delivered to supply a security of a loan or for the public presentation of promise. * RIGHTSThe pledgee has the right of a sale of the sworn goodson default after giving a notice to the pledgor. * Use OF GOODSThe pledgee has no right of utilizing the goods pledged e. g. A located 50 kilograms gold to NationalBank. Bank can non utilize that goods or sell to anyone. | The goods are delivered for a intent other than the above two i. e. For fix and safe detention etc. The bailee has no right of sale. He can retain the goods or Sue for the dues. There is no such limitation. if the nature of dealing so requires.

When can a non-owner brand a valid Pledge?

The proprietor of goods can ever do a valid-pledge. In the undermentioned instances. one who is non. an proprietor can do I valid pledge.

1. Mercantile Agent

A mercantile agent. who is. with the consent of the proprietor. in ownership of the goods or of the paperss of rubric to goods. can do a valid pledge of the goods while moving in the ordinary class of concern of a mercantile agent. Such a pledge will be valid even if the agent had no authorization to plight. provided that the Pawnee Acts of the Apostless in good religion and has non at the clip of the pledge any notice that the pawnor has no authorization to plight ­Sec. 178.

2. Possession under a rescindable contract

A individual holding ownership of goods under a rescindable contract can do a valid pledge of the goods so long as the contract is non rescinded. The Pawnee gets a good rubric to the goods provided he acts in good religion and without notice of the pawnor’s defect of rubric. -Sec. 178

Examples:
A gets an decoration by bring oning the proprietor to sell it to him by undue influence. Before the contract is rescinded by the proprietor. he pawns it to B. B will acquire a good rubric to the decoration provided he acted in good religion and was unaware of A’s faulty rubric.

3. Pawnor with a limited involvement

Where a individual pledges goods in which he has merely a limited involvement. the pledge is valid to the extent of that involvement. – Second. 179.

4. Possession with co-owner

If one of several co-owners is in exclusive ownership of the goods with the consent of the proprietors. he can do a valid pledge of he goods. -Sec. 30 ( I ) . Sale of Goods Act. RIGHTS OF PLEDGEE OR PAWNEE

1. Right of Retainer

“The Pawnee can retain the goods pledged non merely for payment of the debt or the public presentation of the promise. but besides for the involvement of the debt and all necessary disbursals incurred by him in regard of the ownership or for the saving of the goods pledged. ”-Sec. 173.

2. Retainer for subsequent progress

The Pawnee’s lien is a peculiar lien. i. e. . he can non retain the goods for any debt other than the debt for which the security was given unless there is an express contract to the contrary. the Pawnee makes fresh progresss to the same debitor it will he assume that the debitor has agreed to. make on the goods already pledged a lien for the fresh progress. -Sec. 174

3. Extraordinary disbursals

The Pawnee is entitled to have from the pawnor extra­0rrlinary disbursals incurred by him for the saving of the goods pledged. -Sec. 175. .

4. Pawnee’s right where pawnor makes default

If the pawnor makes a default in payment of the debt. or public presentation. at the stipulated clip of the promise. in regard of which the goods were pledged. the Pawnee may convey a suit against the pawnor upon the debt or promise. and retain the goods pledged as indirect security ; or. he may sell the thing pledged on giving the pawnor sensible notice of the sale.

If the returns of such sale are less than the sum due in regard of the debt or promise. the pawnor is still apt to pay the balance. If the returns of the sale are greater than the sum so due. the Pawnee shall pay over the excess to the pawnor. -Sec. 176.

Right OF PLEDGOR

1. Defaulting pawnor’s right to deliver

‘’If a clip is stipulated for the payment of the debt. or public presentation of the promise. for which the pledge is made. and the pawnor makes default in payment of the debt or public presentation of the promise at the stipulated clip. he may deliver the goods pledged at any subsequent clip before the existent sale of them ; but he must. in that instance. wage. in add-on. any disbursals which have arisen from his default. ”-Sec. 177.

2. Preservation and care

The pledgor can implement the saving and proper main­tenance of the goods pledged.

3. Protection of debitors

The pledgor as a debitor has assorted rights given to him by legislative acts enacted for the protection of debitors e. g. . the Money­lenders Acts.

Agency

Section 182 of the Contract Act. 1872 is the specifying subdivision of an Agent. It states:

“An agent is a individual employed to make any act for another or to stand for another in covering with 3rd individual. the individual for whom such act is done or who is so represented is called Principal. ’’

The contract which creates the relationship of principal and agent is called “Agency” .

Necessities of an Agency

The following three subdivisions ( 183. 184 and 185 ) explain the same.

Agreement:

The relationship of bureau is the consequence of an understanding between the Principal and the agent.

Agency may be created:

( A ) By an Express understanding ( When such understanding is written or spoken it is express ) . or

( B ) By Implication ( When understanding is by behavior. state of affairs or relationship of parties ) . Implied bureau may be. –

( I ) By estoppels ;

( two ) By keeping ;

( three ) By necessity ( as in exigency. for safety of chief. between hubby and married woman ;

( four ) By operation of jurisprudence.

( C ) By Ratification ( Where Acts of the Apostless are done by individual on behalf of another but without the cognition or authorization. he may elect to sign such Acts of the Apostless. If he ratifies them. the same effects will follow as if those had been performed.

As for the contractual capacity it is non the same for the principal and the agent. under the Contract Act. 1872.

A principal must be competent to contract. he must hold attained the age of bulk. and he should be sane ( of sound head ) . Thus a child can non name an agent. [ Section 183 ]

An agent need non be competent to contract. A individual may contract through a minor agent. [ s. 184 ]

IS CONSIDERATION NECESSARY TO CREATE AN AGENCY?

Normally lawful consideration is one of the indispensable elements to represent a valid understanding. An understanding enforceable by jurisprudence is called a contract. All understandings are contract if they are made by free consent of parties. competent to contract. for a lawful consideration and with a lawful object and non expressly declared as nothingness.

There are certain distinguishable points in the instance of an understanding bureau. As for consideration it is non necessary to make an bureau [ s. 185 ] As for purpose to move on behalf of principal. the agent must hold purpose to move on behalf of the principal.

DUTIES OF AN AGENT

As for responsibilities of an agent towards his principal. those are:

( I ) Duty to put to death Principal’s authorization.

( two ) Duty to follow principal’s way or usage under subdivision 211.

( three ) Duty to work with sensible attention and diligence under subdivision 212.

( four ) Duty to render histories under subdivision 213.

( V ) Duty to pass on in trouble and acquire instructions from the principal under subdivision 214.

( six ) Duty on expiration of bureau to take sensible stairss for protection of involvements of the Principal.

( seven ) Duty non to cover on his ain histories in the concern of bureau without obtaining anterior permission of the Principal.

( eight ) Duty non to do any secret net income out of his bureau.

( nine ) Duty to remit all amounts received on his history to the Principal. [ section218 ] .

( ten ) Duty non to depute authorization to another individual but to execute the work of bureau himself. [ subdivision 190 ] .

RIGHTS OF AN AGENT

An agent has the following rights under the jurisprudence:

( I ) Right to have wage [ subdivision 219 ]

( two ) Right to retain out of the money recovered on history of the principal. all moneys in regard of the wage. progresss or sensible disbursals incurred by him in carry oning the concern of bureau. Harmonizing to judicial case in point an agent can retain merely such money as is in his ownership.

( three ) Right of lien over goods. documents and other belongings whether movable or immoveable of the principal until the sum dew as committee and disbursals has been paid to the agent. [ s. 221 ]

( four ) Right to be indemnified against the effects of all lawful Acts of the Apostless done by the agent in exercising of authorization conferred upon him by the principal. [ s. 222 ]

( V ) Right to be indemnified against effects of Acts of the Apostless done in good religion [ s. 223 ]

( six ) Right to compensation for hurt sustained by the agent due to the principal’ disregard or privation of accomplishment. [ s. 225 ]

( seven ) Right to stoppage of goods in theodolite to the principal like unpaid marketer. if he has brought goods with his ain money and the principal has become insolvent.

HOW AN AGENCY CAN BE TERMINATED?

An bureau can be terminated in the undermentioned ways:

( 1 ) By Agreement.
( 2 ) By Revocation of the Principal.
( 3 ) By Revocation of the Agent
( 4 ) By completion of the concern of bureau.
( 5 ) By termination of the clip.
( 6 ) By decease of Principal or Agent.
( 7 ) By Insanity of Principal or Agent.
( 8 ) By Insolvency of the Principal.
( 9 ) Principal and Agent going foreign enemy.
( 10 ) Where it is created by illegal contract.