chhatramani/nepal_legal_acts_corpus_english huggingface dataset:
Muluki Civil Code, 2017

531. Performance of contract not required if there is a fundamental change in circumstances: (1) If there is a fundamental change in the circumstances existing at the time of making the contract, making it impossible to perform the contract, the work as per the contract need not be done.

(2) Without prejudice to the generality of subsection (1), a fundamental change in the circumstances existing at the time of making the contract shall be deemed to have occurred in any of the following situations:-
(a) If the contract becomes illegal and cannot be performed,
(b) If circumstances beyond human control, such as war, flood, landslide, fire, earthquake, volcano, arise, making it impossible to perform the contract,
(c) If the object which was necessary for the performance of the contract is destroyed or damaged, ceases to exist, or becomes unobtainable,
(d) If the contract was to provide services based on personal competence, skill, or talent, and the person providing such service dies, becomes of unsound mind, or becomes unable to perform the contract due to physical or mental disability.

(3) Notwithstanding anything written in subsection (2), a fundamental change in the circumstances existing at the time of making the contract shall not be deemed to have occurred in any of the following situations:-
(a) If there is difficulty in performing the contract,
(b) If there is low profit or loss in performing the contract,
(c) If the party obligated to perform the contract is dependent on a third party who is not a party to such contract, and such third party makes a mistake or becomes incapable,
(d) If there is a strike or lockout,
(e) If additional taxes, fees, or any other revenue must be paid,
(f) If the contract was made for more than one purpose, and any of those purposes cannot be fulfilled.

(4) If a situation as per subsection (3) arises, the parties may negotiate to review or amend the terms of the contract, unless otherwise provided in the contract.

(5) If, due to a fundamental change in circumstances as per subsection (2), it becomes impossible to perform the contract, the following shall apply:-
(a) Any amount paid by one party to the other under the contract before such change in circumstances must be refunded to the other party,
(b) Any amount that one party is required to pay or has remaining to pay to the other party under the contract shall not be payable after such change in circumstances,
(c) If any party has already performed any work or paid any amount before such change in circumstances, an account of such work or amount shall be made, the amount payable to each other shall be determined, and the reasonable expenses incurred by a party under such contract may be recovered from the other party.

(6) Notwithstanding anything written elsewhere in this section, after the situation mentioned in clause (b) of subsection (2) ends, the parties to the contract may agree to continue the performance of the contract and fulfill their respective obligations.
Muluki Civil Code, 2017

532. To provide facilities: (1) The parties to a contract shall provide each other with the facilities necessary for the performance of the contract from their side.
(2) If the contract cannot be performed due to the failure to provide facilities as per subsection (1), the party failing to perform shall not be liable. 533. Contract may be suspended or amended: (1) With the consent of the party to the contract, the whole or any part of the work to be done as per the contract may be amended or modified, the period for doing the work as per the contract may be extended, the contract may be suspended so that the work to be done as per the contract need not be done for some time, some other work may be done instead of the work specified in the contract, or another contract may be made instead of such contract.
(2) If the contract is amended or modified as per subsection (1), it shall be deemed to be a new contract and shall be effective accordingly.
(3) If a new contract is made as per subsection (2), liability under the original contract need not be borne, unless otherwise provided in such new contract. 534. Limitation period: A person aggrieved by any action or proceeding under this Chapter may file a suit within two years from the date on which the cause of action arises. Chapter-5

Provisions relating to Breach of Contract and Remedies

535. Deemed breach of contract: (1) If any party to a contract fails to fulfill the obligations as per the contract, gives notice to the other party that he/she will not do the work to be done as per the contract, or appears to be unable to do the work as per the contract from his/her actions and conduct, he/she shall be deemed to have breached the contract.
(2) If a party has breached the contract as per subsection (1), and it appears from his/her actions or conduct that he/she has substantially failed to perform the contract, or it appears that there has been a substantial breach of contract from the conduct or actions of the party, the other party may, by giving notice to such party, rescind such contract.
(3) If the contract is rescinded as per subsection (2), the party rescinding the contract shall not be bound to perform the contract. 536. Indivisible nature of authority to rescind contract: If a party to a contract consists of two or more persons, the contract may be rescinded only if the act of rescission is done by all such persons or is made applicable to all such persons. 537.
Muluki Civil Code, 2017

536. Indivisible nature of authority to rescind contract: If a party to a contract consists of two or more persons, the contract may be rescinded only if the act of rescission is done by all such persons or is made applicable to all such persons. 537. Compensation for breach of contract: (1) If a contract is breached as per Section 535, the party aggrieved thereby may recover from the party committing the breach the actual loss or damage caused by the breach, or the loss or damage determined based on the knowledge of the parties to the contract at the time of making the contract that such loss or damage might occur.
(2) If the contract contains a pre-estimate of a certain amount to be received as compensation in case of breach, the aggrieved party may recover from the other party a reasonable amount as per subsection (1), not exceeding such amount.
(3) If there is no provision for compensation in the contract as per subsection (2), the party claiming such compensation may recover the direct and actual loss or damage caused by the breach of contract, or a reasonable amount as compensation for the breach. Provided that indirect or imaginary loss or damage shall not be recoverable.
(4) If the contract is to complete a certain work within a specific period, and such work is not completed within that period, and if there is a provision for compensation as per subsection (2), the party paying such compensation may demand an extension of the period for completing the contract in proportion to the amount of compensation paid.
(5) The mere fact that compensation has been paid under this section shall not be deemed to adversely affect the right of a party to obtain other legal remedies in relation to the breach of contract. 538.
Muluki Civil Code, 2017

538. Consequences of rescission or voidness of contract: (1) If, after a party to a contract has received any cash, goods, or other benefits of service from the other party as per the contract, or has partially fulfilled the obligations as per the contract, the contract is rescinded by agreement of the parties, or performance of the contract is no longer required under this Part or other law, or the contract becomes void or is declared void by law, or the contract becomes invalid or is rescinded under this Part, the cash, goods, or service so given shall be returned after settling accounts up to the day the contract remained in force.
(2) If any service or benefit other than cash or goods was given as per subsection (1), the party receiving such service or benefit shall pay a reasonable amount to the other party for such service or benefit.
(3) If legal proceedings become necessary due to failure to return cash or goods or pay the amount as per subsection (1), the reasonable expenses incurred therein may also be recovered. 539. Recovery of amount in proportion to performance of contract: If a party has breached the contract or the contract is terminated for any other reason, the aggrieved party may claim from the other party the amount as per the contract in proportion to the work done or the performance of the contract. 540. Specific performance of contract: (1) If cash compensation for the actual loss or damage suffered by the aggrieved party due to the breach of contract is not reasonable and adequate, the aggrieved party may demand specific performance of the contract instead of compensation.
(2) Notwithstanding anything written in subsection (1), specific performance of the contract cannot be demanded in any of the following situations:-
 (a) If cash compensation for the breach of contract is adequate,
 (b) If the court cannot supervise whether the work as per the contract has been done or not,
 (c) If the contract was made to provide services of personal skill, talent, or knowledge,
 (d) If the situation does not allow specific performance,
 (e) If the party committing the breach itself claims specific performance of the contract. 541.
Muluki Civil Code, 2017

541. Court may order: (1) If the performance of the contract becomes impossible due to any act, action, or behavior that a party to such contract is about to undertake, which ought not to be done according to the nature of such contract, the party aggrieved by such act, action, or behavior may file a complaint in the court to restrain such act, action, or behavior.
(2) If a complaint is filed as per subsection (1), the court may issue an appropriate order to immediately restrain any specific act, action, or behavior of a party, provided that the resolution of the dispute arising from such contract shall be according to such contract or law.
(3) If an order is issued as per subsection (1), and such party fails to comply with the order so given, the aggrieved party may also recover the additional loss or damage caused thereby. 542. Compensation to be determined in monetary value: Unless otherwise provided in the contract, when assessing compensation for loss or damage under this Chapter, it shall be determined in monetary value. Provided that, with respect to the remedy under Section 540, it shall be according to that Section. 543. Court may consider: When determining compensation arising from a breach of contract, the court shall consider whether such breach was intentional by the party or occurred due to negligence, and also what amount or benefit the innocent party could have obtained if the breach had not occurred. 544. Limitation period: A person aggrieved by any action or proceeding under this Chapter may file a suit within two years from the date on which the cause of action arises. Chapter-6

Provisions relating to Contract of Sale of Goods

545. Deemed contract for sale of goods: (1) If any seller, for a price, agrees to transfer any goods to a buyer immediately or in the future, it shall be deemed to be a contract for sale of goods. Explanation: For the purpose of this Chapter, "goods" means any movable property that can be bought and sold, excluding current money, securities, or an enforceable claim.
(2) A contract for sale of goods may be without condition or with condition.
(3) A contract may be made for the sale of goods currently in the possession or use of the seller, or goods that he/she will produce or obtain in the future. 546.
Muluki Civil Code, 2017

546. Contract for sale of goods void: If a contract is made to sell a specific kind of goods, and at the time of making such contract or before that, such goods have already been lost or damaged, and the seller was not aware of that fact at the time of making the contract, such contract shall be void. Explanation: For the purpose of this section, "specific kind of goods" means the specific kind of goods mentioned in the contract at the time of making the contract. 547. Determination of price of goods: (1) Unless otherwise provided in the contract, the price of goods shall be determined by the terms of the contract, by the method agreed upon in the contract, or through the course of dealing between the parties.
(2) If the price of goods is determined by measurement or weight, unless otherwise provided in the contract, the price of such goods shall be based on net measurement or weight.
(3) If the price of goods cannot be determined as per subsection (1) or (2), the buyer shall pay a reasonable price to the seller, considering the relevant circumstances. 548. Payment of price of goods: (1) Unless otherwise provided in the contract, the price of goods shall be paid as follows in any of the following situations:-
 (a) At the time of purchase, the buyer shall pay the price of the goods purchased to the seller,
 (b) At the time of delivery of the goods.
(2) When paying the price of goods as per subsection (1), it shall be made in cash. Explanation: For the purpose of this section, "cash" also includes cheques, traveler's cheques, promissory notes, bills of exchange, letters of credit, bank drafts, credit cards, and telegraphic transfers paid through a bank. 549. Description of goods: (1) If the description of the name, brand, trademark, or specification of any goods to be sold is mentioned in the contract, it shall be deemed that the contract is for the sale of goods according to such name, brand, trademark, or specification.
(2) If both the description of the name, brand, trademark, or specification and a sample of the goods to be sold are mentioned, the bulk quantity of such goods must conform not only to the sample but also to the description of the name, brand, trademark, or specification. 550.
Muluki Civil Code, 2017

550. Deemed title in goods sold: (1) Unless otherwise provided in the contract, it shall be deemed that the seller has or will have title to the goods sold (if sold) or to the goods agreed to be sold (if for future sale), and that such goods are or will be free from any possession, control, or use of any other person.
(2) Unless otherwise provided in the contract, it shall be deemed that the seller has the right to sell the goods sold or to be sold. 551. Deemed satisfactory quality of goods: (1) Unless otherwise provided in the contract, the goods sold or to be sold shall be deemed to be of satisfactory quality.
(2) If any specific goods sold or to be sold are fit for a particular purpose, such goods shall be deemed to be of satisfactory quality.
(3) Notwithstanding anything written in subsection (2), if the defect in such goods is mentioned in the contract, or if the buyer was aware of it before such contract or upon seeing the goods, such goods shall not be deemed to be of unsatisfactory quality.
(4) If the quality of any specific goods is mentioned in the contract, it shall be according to that; if not mentioned, such goods must be of a quality according to the prevailing standard.
(5) Unless otherwise provided in the contract, the seller shall not be deemed to have warranted that the goods sold or to be sold are of a specific quality. 552. Right to accept or reject goods of different quality: (1) If the buyer brings goods of different quality than that specified in the contract, the buyer may accept and take delivery of all such goods, reject all goods, or accept part of them and reject the remainder.
(2) If any goods are wholly or partially rejected as per subsection (1), the buyer may give notice to the seller to deliver other goods in place of such goods or to improve the quality of such goods, if possible.
(3) If notice is given as per subsection (2), the seller shall deliver other goods in place of such goods or improve their quality as per the notice given by the buyer or according to the agreement reached between them. 553.
Muluki Civil Code, 2017

553. Deemed contract of sale by sample: (1) If the contract expressly or impliedly provides for the sale of goods by sample, it shall be deemed to be a contract for sale by sample.
(2) If a contract is made for the sale of goods by sample, unless otherwise provided in the contract, the following terms shall be deemed to be included in such contract:-
 (a) that the bulk of the goods shall correspond in quality with the sample,
 (b) that the buyer shall have a reasonable opportunity of comparing the bulk of the goods with the sample,
 (c) that the goods sold or to be sold shall be free from any defect and of satisfactory quality upon inspection when comparing with the sample. 554. Provisions relating to transfer of title in goods: (1) If a contract is made for the sale of specific or ascertained goods, the transfer of such goods shall be as mentioned in the contract, and if not mentioned in the contract, it shall be according to the intention of the parties as expressed by the terms of the contract, the conduct of the parties, and the relevant circumstances.
(2) Unless otherwise provided in the contract, if a contract is made for specific goods in a deliverable state, it shall be deemed that the intention of the parties is to transfer the goods after the contract is made or after the price is paid.
(3) If a contract is made for specific goods in a deliverable state, and the buyer is required to perform any act such as measuring, weighing, testing, or any other act to ascertain the price, the goods shall not be transferred until such act is performed and the buyer gives notice thereof to the seller within a reasonable time.
(4) Unless otherwise provided in the contract, it shall be deemed that the contract is for the transfer of goods at the place where the goods sold or to be sold are located.
(5) Unless otherwise provided in the contract, it shall be deemed that the title or ownership in the goods passes to the buyer at the time of delivery of the goods to the buyer. 555.
Muluki Civil Code, 2017

555. Bearing of risk: (1) Unless otherwise provided in the contract, until the goods are delivered to the buyer, the risk of loss or damage to such goods shall be borne by the seller.
(2) If delivery is delayed due to the fault of the seller or the buyer, the person causing the delay shall bear the risk of loss or damage to the goods as per subsection (1).
(3) If the seller has agreed to deliver the goods from the place of purchase to the place specified by the buyer, unless otherwise provided in the contract, the risk of loss or damage to such goods shall be borne by the seller. 556. Buyer's right to ascertain goods: When goods sold are delivered to the buyer, the buyer shall have a reasonable opportunity to examine and ascertain whether such goods are as per the contract, and the buyer shall not be deemed to have accepted the goods until he/she has so ascertained. 557. Deemed acceptance of goods: The buyer shall be deemed to have accepted the goods in any of the following situations:-
 (a) if the buyer or his/her representative accepts the goods,
 (b) if a receipt or voucher for acceptance of the goods is given,
 (c) if, after ascertaining the goods as per Section 556 and confirming they are as per the contract, the buyer stores them,
 (d) if any goods have been sent to the buyer and he/she retains such goods without giving notice to the seller within a reasonable time that he/she rejects them,
 (e) if any act is done by him/her that confirms his/her ownership and control over such goods. 558. Time for delivery of goods: (1) If the contract specifies that any goods must be delivered at a specific time or within a specific period, the seller must complete delivery of such goods to the buyer within that time or period.
(2) Notwithstanding anything written in subsection (1), if the buyer accepts goods delivered by the seller before or after the time or period specified in the contract, the seller shall be deemed to have delivered the goods. 559. Delivery of documents relating to goods sold: Unless otherwise provided in the contract, if any goods are sold, and the seller delivers the goods without delivering the documents related to the title of such goods or those fundamentally necessary for the use of such goods, the transfer of title shall not be deemed to have taken place. 560. Goods not to be delivered in different quantity than contracted: (1) If the seller delivers a lesser quantity of goods than specified in the contract, the buyer may reject such goods.
Muluki Civil Code, 2017

560. Goods not to be delivered in different quantity than contracted: (1) If the seller delivers a lesser quantity of goods than specified in the contract, the buyer may reject such goods. Provided that if the buyer accepts such quantity of goods, he/she shall pay the price for that quantity at the rate specified in the contract.
(2) If the seller delivers a larger quantity of goods than specified in the contract, the buyer may accept the quantity specified in the contract and reject the remainder, or reject the whole quantity. Provided that if the buyer accepts the whole quantity delivered, he/she shall pay the price for the whole quantity at the rate specified in the contract.
(3) If the seller delivers goods mixed with goods of a different description than specified in the contract, the buyer may accept the goods specified in the contract and reject the remainder, or reject the whole.
(4) Unless otherwise provided in the contract, the buyer shall not be bound to accept goods in installments.
(5) If the buyer rejects goods delivered by the seller, unless otherwise provided in the contract, the buyer shall not be bound to return the rejected goods. Provided that the buyer shall give notice to the seller by the quickest means, stating the reason for rejection. 561. Special provisions relating to compensation: Notwithstanding anything written elsewhere in this Part, with respect to compensation for a contract under this Chapter, the following shall apply:-
 (a) If, after a contract for sale of goods is made, the buyer does not accept the goods or refuses to accept them, or refuses to pay the price, the seller may, subject to the contract, claim compensation from the buyer for such non-acceptance or refusal,
 (b) When determining compensation as per clause (a), if the goods not accepted or refused to be accepted by the buyer are available in the market, the compensation shall be determined based on the difference between the contract price and the market or prevailing price of such goods,
 (c) If, after a contract for sale of goods is made, the seller does not deliver the goods to the buyer as per the contract, or refuses to deliver them, the buyer may claim compensation from the seller for non-delivery,
 (d) When determining compensation as per clause (c), if the goods not delivered or refused to be delivered by the seller are available in the market, the compensation shall be determined based on the difference between the contract price and the market or prevailing price of such goods. 562.
Muluki Civil Code, 2017

562. Limitation period: A person aggrieved by any action or proceeding under this Chapter may file a suit within two years from the date on which the cause of action arises. Chapter-7

Provisions relating to Contract of Guarantee

563. Deemed contract of guarantee: (1) If a contract is made by which a third party agrees to pay or perform a loan taken or a liability undertaken by one person, in case such person fails to pay or perform, it shall be deemed to be a contract of guarantee.
(2) If a third party has given a guarantee as per subsection (1), and the person liable to pay the loan or perform the obligation fails to do so, the person giving the guarantee shall pay or perform such loan or obligation according to the terms of the contract.
(3) The terms of the guarantee shall be as determined in the contract.
(4) A contract of guarantee must be in writing. 564. Liability of the guarantor: (1) Unless otherwise provided in the contract, the liability of the guarantor shall be as follows:-
 (a) The liability of the guarantor arises from the time the person required to perform the obligation fails to do so,
 (b) The liability of the guarantor shall be the same as that of the person liable to pay the loan or perform the obligation, and the guarantor shall remain responsible until such person is not discharged from the payment or performance liability,
 (c) The liability of the guarantor shall not be extinguished merely because the person liable to pay the loan or perform the obligation is discharged from the liability by operation of law.
(2) Notwithstanding anything written in subsection (1), if both security and a guarantee are provided for a loan or obligation, the guarantor shall not be liable to the extent covered by such security.
(3) As soon as the obligation payable to the creditor is breached by the person liable to pay or perform, the contract of guarantee shall become effective, and the creditor may enforce such obligation against the guarantor. Explanation: For the purpose of this Part, "creditor" means the person lending the loan, and such term also means a person entitled to receive any benefit or to have any work done from the person liable to pay the loan or perform the obligation.
(4) Notwithstanding anything written in subsection (3), before claiming from the guarantor the amount not paid or the obligation not performed as per the contract of guarantee, the creditor shall give notice to the debtor to perform the contract according to the terms or conditions of the contract. 565.
Muluki Civil Code, 2017

565. Circumstances for discharge of the guarantor from liability: (1) Unless otherwise provided in the contract, in any of the following situations, the guarantor shall be discharged from his/her liability to the extent specified:-
 (a) If, without the consent of the guarantor, the person liable to pay the loan or perform the obligation makes any alteration in the terms of the contract that materially affects the contract, then for transactions subsequent to such alteration,
 (b) If a contract is made discharging the person required to perform the obligation from the liability for which the guarantee was given,
 (c) If, by any act of the creditor, the person liable to pay the loan or perform the obligation is discharged, or the debt is remitted,
 (d) If the creditor agrees to accept a lesser sum than due from the debtor and discharge him/her, or to grant him/her further time for payment or not to sue,
 (e) If any act of the creditor adversely affects the legal remedy of the guarantor against the person liable to pay the loan or perform the obligation,
 (f) If the creditor loses, damages, or returns to the debtor any security taken from the debtor, to the extent of the value of such security,
 (g) To the extent that the amount payable to the creditor or the obligation to be performed as per the contract has been paid or performed by the person liable to pay or perform.
(2) Notwithstanding anything written in subsection (1), unless otherwise provided in the contract, the guarantor shall not be discharged from his/her liability merely because the creditor has not taken legal proceedings against the guarantor in time or has not made efforts to recover the amount due.
(3) If there are two or more guarantors, and the creditor releases any one guarantor from liability, the other guarantors shall not be discharged from their share of the liability.
(4) Notwithstanding anything written in subsection (3), if the share of liability of the guarantors cannot be distinguished, even if the creditor releases any one guarantor, he/she shall not be deemed to be discharged from his/her liability.
(5) Unless otherwise provided in the contract, the guarantor shall not be discharged from performance of the obligation under the contract of guarantee merely because a dispute has arisen between the parties regarding the contract that created the obligation for which the contract of guarantee was made. 566.
Muluki Civil Code, 2017

566. Relationship between guarantor and debtor: (1) The guarantor shall require the person liable to pay the loan or perform the obligation to pay the loan or perform the obligation as per the contract.
(2) If, at the time of taking the loan or obligation, the debtor has given any property or security to the guarantor for the guarantee, such person shall not, without the consent of the debtor, pledge, sell, or otherwise transfer his/her right over such property or security.
(3) If a loan or obligation was taken for a specific purpose and a guarantee given for it, the purpose, nature, or terms of such loan or obligation shall not be altered without the consent of the person giving the guarantee.
(4) Notwithstanding anything written elsewhere in this section, the relationship between the guarantor and the debtor shall be as otherwise written in the contract. 567. Substitution of guarantor in place of creditor: (1) After the guarantor pays or performs the loan or obligation payable or performable on behalf of the debtor to the creditor, the guarantor shall be substituted in place of the creditor with respect to such loan or obligation, and he/she may recover the debt from the debtor or take legal proceedings against the debtor as the creditor.
(2) Notwithstanding anything written elsewhere in this Chapter, the debtor shall pay to the guarantor the entire amount paid or performed on his/her behalf by the guarantor, including interest or any other charges or amounts payable thereon.
(3) If legal proceedings become necessary due to the debtor's failure to pay the amount due as per subsection (2), or if any other expenses are incurred therefor, the guarantor may also recover such expenses. 568. Circumstances in which contract of guarantee may be voided: The guarantor may void the contract of guarantee in any of the following situations:-
 (a) if the guarantee was obtained by giving false or misleading information or knowledge to the guarantor by the creditor himself/herself or by anyone else with his/her consent, regarding the subject matter of the transaction for which the guarantee was given,
 (b) if the subject matter, property, or fact of the guarantee was concealed or not mentioned,
 (c) if the contract was made with the understanding that a third person would also be a guarantor, and such person did not consent to give the guarantee. 569.
Muluki Civil Code, 2017

569. Liability of guarantors equal: (1) If two or more persons jointly or severally give a guarantee for a loan or obligation, and such loan or obligation is not fulfilled by the debtor, unless otherwise provided in the contract, the guarantors shall pay such loan or perform the contract in equal shares.
(2) If, when giving a guarantee jointly as per subsection (1), the guarantee is given in parts, the guarantor shall only be liable for the part for which he/she gave the guarantee. 570. Continuing guarantee: (1) If a guarantee is given covering a series of transactions, it shall be deemed to be a continuing guarantee.
(2) If a guarantee is provided as per subsection (1), regardless of how many times such transactions occur, the guarantor shall be liable for the amount not paid up to the amount of the guarantee during the period the guarantee contract remains in force.
(3) The guarantor may, by giving at least three months' notice in advance to the creditor, revoke the continuing guarantee with respect to future transactions.
(4) Unless otherwise provided in the contract, if the guarantor dies, the continuing guarantee shall be deemed to be automatically terminated for transactions thereafter. 571. Deemed contract of indemnity: (1) If a person, while acting under the instructions of a party to a contract, makes a contract to bear any loss or damage that may occur to him/her or to such party or a third party from the actions of such party or third party as a result of his/her actions, it shall be deemed to be a contract of indemnity.
(2) If a contract is made as per subsection (1), subject to such contract, such person may recover any or all of the following amounts as compensation:-
 (a) the indemnity amount as mentioned in the contract,
 (b) the amount payable for loss or damage caused to a third party, if any,
 (c) the cost incurred in any suit filed or defended by him/her in relation to the contract of indemnity,
 (d) the cost incurred in any suit or case if a suit or case had to be filed due to non-payment of the amount under clause (a), (b), or (c).
(3) Notwithstanding anything written in subsection (2), unless otherwise provided in the contract, if a person, while acting under the instructions of another party, causes loss or damage to such party or a third party due to intentional misconduct or negligence, the person performing such act shall be responsible for such loss or damage. 572.
Muluki Civil Code, 2017

572. Provisions relating to subrogation: (1) If a contract is made with a person against loss or damage that may be caused by a third party to the property, benefits, rights, or advantages from transactions of a person, the person making such contract shall bear such loss or damage regardless of who caused it. Provided that if there is a contract that such loss or damage shall be borne by another person, it shall be caused to be paid or recovered from such person.
(2) If the contract specifies providing a certain amount or compensation for the loss or damage incurred as per subsection (1), it shall be provided accordingly; if not specified, a reasonable amount or compensation shall be given immediately to the person affected by the loss or damage, or if such person has died, to his/her legal representative.
(3) If loss or damage occurs as per subsection (1), the person providing the amount or compensation as per subsection (2) shall be deemed to be subrogated to the position of the person who suffered the loss or damage, and accordingly, the person so subrogated may recover the amount or compensation for the loss or damage from the person causing the loss or damage. 573. Rights of the subrogated person: The rights and liabilities of the subrogated person shall be as written in the contract, and if not written, as follows:-
 (a) All rights of the person who suffered the loss or damage under the contract shall pass to the subrogated person,
 (b) The subrogated person may recover from the person causing the loss or damage, or if there is a contract regarding the matter, from the party to such contract, the amount paid or reasonable compensation paid to the person who suffered the loss or damage, and also the expenses incurred if legal remedy was sought therefor. 574. Limitation period: A person aggrieved by any action or proceeding under this Chapter may file a suit within two years from the date on which the cause of action arises. Chapter-8

Provisions relating to Contract of Bailment

575. Deemed contract of bailment: (1) If one person delivers any goods to another person to be kept, with the condition that the goods be returned to him/her or transferred or sold to someone else as directed by him/her, it shall be deemed to be a contract of bailment. Explanation: For the purpose of this Chapter, "goods" means any movable property, excluding currency in circulation, and also includes rights in such property.
(2) If goods worth more than twenty-five thousand rupees are kept as bailment when making a contract as per subsection (1), a document must be made. 576.
Muluki Civil Code, 2017

Explanation: For the purpose of this Chapter, "goods" means any movable property, excluding currency in circulation, and also includes rights in such property.
(2) If goods worth more than twenty-five thousand rupees are kept as bailment when making a contract as per subsection (1), a document must be made. 576. Deemed delivery and receipt of bailment: (1) After the bailee receives the goods delivered for bailment, the act of delivery and receipt of bailment shall be deemed complete.
(2) If any goods are already in the possession or custody of a person or his/her authorized agent, such person shall be deemed to have taken such goods as bailment. 577. Information about goods kept as bailment to be provided: (1) If, due to any defect in the goods delivered for bailment, such goods are not fit for use, may cause any loss or damage, or require separate arrangements or management for their preservation, the person delivering the goods shall inform the bailee of all such matters known to him/her.
(2) If the person delivering the bailment, knowing the matters required to be informed as per subsection (1), fails to inform the bailee, the person delivering the bailment shall bear the loss or damage caused by such goods or due to them.
(3) Notwithstanding anything written in subsection (2), if any loss or damage occurs due to a defect in any goods given in bailment while using such goods, the person delivering the bailment shall bear such loss or damage even if he/she had no knowledge of the defect in such goods. 578. Duties of the bailee: (1) The bailee shall take reasonable care and safeguard the goods taken as bailment as per the terms mentioned in the contract, and if such terms are not mentioned, as he/she would of his/her own goods.
(2) Unless otherwise provided in the contract, if, despite taking care and safeguarding as per subsection (1), the goods taken as bailment are lost, stolen, damaged, deteriorated, diminished, or destroyed due to a disaster, the bailee shall not be required to return such goods.
Muluki Civil Code, 2017

Provided that if such goods are lost, stolen, damaged, deteriorated, diminished, or destroyed due to the negligence or misconduct of the bailee, or due to failure to take care or safeguard as per the terms of the contract, he/she shall give such goods or an amount equal to their value to the person delivering the bailment.
(3) If the bailee uses the goods taken as bailment without having the right to use them as per the contract, or uses them contrary to the terms of the contract, and such goods are damaged, lost, deteriorated, or diminished due to such use, the bailee shall compensate the person delivering the bailment for the loss.
(4) Unless otherwise provided in the contract, the bailee shall not mix the goods taken as bailment with his/her own goods. Provided that if, with the consent of the bailor, the bailee mixes his/her own goods with the goods taken as bailment, both shall have rights in such mixed goods and the income derived therefrom in proportion to their respective shares.
(5) If the bailee mixes his/her goods with the bailed goods without the consent of the bailor, and such mixed goods can be separated, the respective rights of the parties shall remain in their respective goods, and the cost of separating such mixed goods and any loss caused to the bailor by such mixing shall be borne by the bailee.
(6) If the bailee mixes his/her goods with the bailed goods without the consent of the bailor, and such goods cannot be separated as per subsection (5), the bailor shall have title to such mixed goods. 579. Goods taken as bailment to be returned:

586. Pledge or deposit to be returned: (1) Unless otherwise provided in the contract, after the loan for which the pledge was kept is repaid or after the work for which the deposit was taken is completed, such pledge or deposit shall be returned to the person who kept such pledge or deposit.

(2) If the pledge or deposit kept pursuant to sub-section (1) is divided into parts or is divisible, to the extent of the part for which the loan has been repaid or the work completed, such pledge or deposit may be returned. 587.
Muluki Civil Code, 2017

587. Rights of the person taking the pledge or deposit: (1) If a person takes a loan by pledging any object and such person fails to repay the loan or, if any, its interest within the stipulated time, the person taking the pledge may, by initiating proceedings according to law, recover the amount due by selling or auctioning the kept pledge according to the prevailing market price, or if it cannot be sold or auctioned, subject to law, transfer such pledge to their own ownership.

(2) If the pledged object is sold under sub-section (1) by the person taking the pledge for a price lower than the amount recoverable from the debtor, the remaining amount up to the shortfall may be recovered from other assets of the debtor, and if it is sold for a price higher than the amount recoverable, the excess amount shall be returned to the debtor.

(3) Notwithstanding anything written in sub-sections (1) and (2), until the pledged object has been sold or ownership has not been transferred, the person giving the pledge may, at any time, repay the loan and its interest and any other amount due and take back their object. Provided that the person giving the pledge shall also bear any additional liability created on the pledged object due to non-payment of the amount within the stipulated time.

(4) If any object is taken as a deposit and a person is entrusted with doing certain work, and such work is not completed within the stipulated time or is not done, the object held as deposit may be used to get the work done or to recover the expenses incurred in getting such work done.

(5) If the work cannot be completed from the object held as deposit, the remaining amount up to the shortfall may be recovered from other assets of the person giving the deposit. 588.
Muluki Civil Code, 2017

588. Consequences of pledging or depositing an object over which one has no right: (1) If a person, having no right or ownership over an object or having obtained an object under a contract that is void under this Part, gives it to someone as a pledge or deposit and obtains a loan or work, and the person taking the pledge or deposit was unaware of this fact, then the person taking the pledge or deposit may demand from the person giving the pledge or deposit an equivalent object over which the latter has a right as a pledge or deposit, and if unable to provide the demanded pledge or deposit, the person taking the pledge or deposit may rescind such contract.

(2) If an object obtained under a contract that is void under this Part is given as a pledge or deposit, and prior to giving such pledge or deposit, such contract had already been voided, or if the person taking the pledge or deposit knew that the object given as pledge or deposit is not owned by the person giving it, then the person taking the pledge or deposit shall have no right over such object, and they may recover the amount due or get the work to be completed from other assets of the person giving the pledge or deposit.

(3) If the person giving the pledge or deposit has a partial or limited right or ownership over the object kept as pledge or deposit, the person taking the pledge or deposit shall have rights only to that extent. 59. Creditors to be in equal position: (1) If a person has taken loans from more than one creditor by pledging any of their objects once or multiple times, and the object so pledged is insufficient to repay the debts of all creditors, then, unless otherwise provided in the contract, all creditors taking the object as security shall be deemed to be in an equal (pari passu) position regarding the remaining debt, and the claim of all creditors over such object shall be in proportionate shares.

(2) A contract made in the future whereby another creditor is given priority over an object already given as pledge under sub-section (1) shall be void. If a creditor, despite knowing that there are other creditors in relation to such debt, has already recovered the debt from such pledge before the rescission of such contract, then such amount shall be returned to the other creditors, and the creditor shall recover from other assets of the person giving the pledge. 50.
Muluki Civil Code, 2017

50. Limitation: A person who suffers loss from any act done under this Chapter may file a suit within two years from the date on which the cause of action arose. Chapter-10

Provisions relating to Agency Contract

51. Agency contract deemed to have been made: Except in matters related to a person's personal competence, a person may appoint another as an agent to do any work on their behalf, carry on a business as an agent, transact with a third person, represent them before such person, or establish any kind of legal relationship between the person appointing the agent (the principal) and the third person; and upon such appointment, an agency contract shall be deemed to have been made. 52. Validity of transactions done by agent: (1) Subject to law, a person may do or cause to be done through an agent any act which they themselves can do. Provided that an act which must be done personally according to law cannot be done through an agent.

(2) Any contract made through an agent appointed under section 51, or any act done by an agent, shall be deemed to be done by the concerned person (principal), and any liability arising from such act shall be implemented as if it were a contract or act done by the principal. Provided that if the agent has done any act exceeding the authority granted to them, the principal shall not be liable for such act unless accepted by the principal.

(3) Notwithstanding anything written in sub-section (1), if among acts done exceeding authority, some acts are within the scope of authority and some are outside the scope, if the part within the scope of authority can be separated, the principal shall be liable for such acts to the extent of the part falling within the scope of authority. 53. Power to appoint sub-agent: (1) Unless otherwise provided in the contract, if according to the nature of any trade, business, or transaction a sub-agent must be appointed, or if a sub-agent may be appointed according to the provisions of the agency contract or practice, the agent may, with the consent of the principal, appoint a sub-agent.
Muluki Civil Code, 2017

Provided that an agent appointed to personally represent or perform the work shall not appoint a sub-agent.

(2) If a sub-agent is appointed under sub-section (1), the principal shall be informed of this fact, and the rights and duties of the sub-agent so appointed shall be the same as those of an agent appointed by the principal.

(3) If an agent appoints a sub-agent without the consent of the principal, the principal shall not be liable for any act done by such sub-agent.

(4) The agent who appointed the sub-agent under sub-section (3) shall be personally liable for such acts. 54. Matters to be observed by the agent: (1) Unless otherwise provided in the contract, the agent shall observe the following matters: -

(a) Act in accordance with the terms of the agency contract and the instructions given by the principal,

(b) If no condition is mentioned in the contract or no instruction is given by the principal, the agent shall perform the entrusted work with good faith, complete diligence, and necessary skill and competence according to the nature of the work, trade, business, and the law and practice of the place where the transaction is carried out,

Provided that if the principal was aware at the time of the contract that the agent lacked skill or competence in a particular matter, such agent shall not be liable for loss or damage caused by such lack of skill or incompetence.

(c) After being removed from the agency, the agent shall not do any work in the same matter in the former capacity as an agent,

(d) When requested by the principal, the agent shall provide or show details of accounts relating to the agency business,

(e) If any obstacle, hindrance, or difficulty arises in the course of the agency work, the agent shall, as soon as possible, inform the principal and obtain necessary instructions, and the principal shall be liable for acts done in accordance with such instructions.

(2) If the principal suffers any loss or damage due to failure to perform the duties required under clauses (a), (b), and (c) of sub-section (1), the agent shall personally bear such loss or damage. 55.