Section 126 of the Indian Contract Act, 1872 – “Contract of guarantee”, “surety”, “principal debtor” and “creditor”

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Section 126: “Contract of guarantee”, “surety”, “principal debtor” and “creditor”

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.

Source: official text of The Indian Contract Act, 1872 as published on India Code (PDF). All sections of the Indian Contract Act, 1872.

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