Understanding Contract Guarantees in India

The Indian Contract Act 1872, defines a contract of guarantee in Section 126.

It is a tri-party agreement involving principal debtor, creditor, and surety.

Surety is also called the guarantor. And what is its purpose? To ensure repayment,

it transfer risk from creditor to someone who trusts the debtor. But here is the

catch, a guarantee is enforceable the moment the debtor defaults unless stated otherwise.

So today's story shows us every essential principle of the law which teaches from co-existive

liability to discharge of surety, from misrepresent- uh, representation to

material alteration. Before Miss Maya signs anything, we just need to know that gua- guarantee