Explain the concept of Contract of guarantee



Posted on 13-05-2016        By ADMIN



 Explain the concept of Contract of guarantee :

cs professional drafting notes

 A “contract of guarantee” is a contract to perform the promise, or discharge the liability, of a third person in case of his default. The person who gives the guarantee is called the “surety”; the person in respect of whose default the guarantee is given is called the “principal debtor”; and the person to whom the guarantee is given is called the “creditor”. A guarantee may be either oral or written. (Section 126 of the Indian Contract Act, 1872)



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