Explain the following terms with reference to the Indian Contract Act, 1872: (i) Pledge by mercantile agent (ii) Pledge by person in possession…

(i) Pledge by mercantile agent: According to section 178 of the Indian Contract Act,1872, a mercantile agent, who is in the possession of goods or document of title, with the consent of owner, can pledge them while acting in the ordinary course of business as a Mercantile Agent. Such Pledge shall be valid as if were made with the authority of the owner of goods. Provided, Pawnee acted in good faith and had no notice that Pawnor has no authority to pledge. (ii) Pledge by person in possession under voidable contract According to section 178A of the Indian Contract Act,1872, When the pawnor has obtained possession of the goods pledged by him under a contract voidable under section 19 or section 19A (contracts where consent has been obtained by fraud, coercion, misrepresentation, undue influence), but the contract has not been rescinded at the time of the pledge, the pawnee acquires a good title to the goods, provided he acts in good faith and without notice of the pawnor’s defect of title.