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Contract of Guarantee
What is a contract of guarantee under Indian Contract Act, 1872?
A contract of guarantee is a contract to perform the promise or discharge the liability of a third person in case of his default. It involves three parties: the surety, the principal debtor, and the creditor.
What is the definition of 'principal debtor' in a contract of guarantee?
The person in respect of whose default the guarantee is given.
Who is called the 'surety' in a contract of guarantee?
The surety is the person who gives the guarantee, i.e., the person who undertakes to perform the obligation or pay the debt if the principal debtor fails to do so.
What is meant by 'creditor' in the context of a guarantee contract?
The person to whom the guarantee is given by the surety.
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