When the liability of surety, which he had undertaken under a contract of guarantee, is extinguished or comes to an end, he is said to be discharged from liability. The modes of discharge of a surety, as recognized by the Indian Contract Act, are as under: 1. Revocation by the surety. (Section 130). 2. By … Read more
In this article, we will discuss meaning of continuing guarantee. We will also discuss that how continuing guarantee can be revoked. The function of a contract of guarantee is to enable a person to get a loan, or goods on credit, or an employment. A guarantee may therefore, be given for (i) the repayment of … Read more
In this article we will discuss the nature and extent of liability of surety in detail and try to measure the maximum extent of surety’s liability. Contract of guarantee A contract of guarantee is precisely stated under Section 126 of the Indian Contract Act, 1872. According to this section, a contract of guarantee can be understood as a … Read more
Contract of Guarantee Section 126 of the Indian Contract Act, 1872, defines a contract of guarantee as under : “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 Section further provides that: “The person who gives the guarantee is … Read more
In this article we will discuss two important points one is when can an indemnifier be made liable? second is can he claim to be indemnified before he is demnified ? There has been a controversy regarding the point, as to whether the indemnifier can be asked to indemnify before indemnity-holder has actually suffered the … Read more
According to Section 124 of the Indian Contract Act, 1872, a contract of indemnity means “a contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself or by conduct of any other person.” This provision incorporates a contract where one party promises to … Read more
According to Longman’s Dictionary of Contemporary English meaning, indemnity is protection against loss, esp. in the form of a promise to pay, or payment for loss of money, goods, etc. According to Chambers New English Dictionary, “Indemnity is a security against, or compensation for loss, etc.” For instance, A contracts to indemnify B against the … Read more