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Contract of Guarantee Quiz

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Questions and Answers

Which section of the Indian Contract Act, 1872, defines a 'Contract of Guarantee'?

Section 128
Section 129
Section 127
Section 126 (correct)

Who is referred to as the 'surety' in a Contract of Guarantee?

The person who gives the guarantee (correct)
The person in respect of whose default the guarantee is given
The person to whom the guarantee is given
All of the above

What is the object or purpose of a Contract of Guarantee?

To perform the promise of a third person
To discharge the liability of a third person
To protect the creditor in case of the debtor's default
All of the above (correct)

Can a Contract of Guarantee be oral?

Yes, it can be oral (A) Signup and view all the answers

In a Contract of Guarantee, who is the 'principal debtor'?

The person in respect of whose default the guarantee is given (B) Signup and view all the answers

Which section of the Indian Contract Act, 1872, defines the parties to a Contract of Guarantee?

Section 126 (C) Signup and view all the answers

Who is the 'creditor' in a Contract of Guarantee?

The person to whom the guarantee is given (A) Signup and view all the answers

In a Contract of Guarantee, who is the 'principal debtor'?

The person in respect of whose default the guarantee is given (C) Signup and view all the answers

Can a Contract of Guarantee be oral?

Yes, it can be either oral or written (A) Signup and view all the answers

What is the object or purpose of a Contract of Guarantee?

To perform the promise or discharge the liability of the principal debtor (A) Signup and view all the answers

Study Notes

Contract of Guarantee

A 'Contract of Guarantee' is defined in Section 126 of the Indian Contract Act, 1872.
The 'surety' is the person who gives the guarantee.
The object or purpose of a Contract of Guarantee is to ensure the payment or performance of a debt or obligation by the principal debtor.
A Contract of Guarantee can be oral, but it is generally recommended to have it in writing.
The 'principal debtor' is the person who is primarily responsible for the debt or obligation.
Section 126 of the Indian Contract Act, 1872 defines the parties to a Contract of Guarantee.
The 'creditor' is the person to whom the guarantee is given, and who will benefit from its performance.