Write a note on Contract of Guarantee or Contract of Surety or Accessory Contract

Contract of Guarantee :-
It is defined in the following words, "A contract of guarantee is a contract to perform the promise or discharge the liability of the third person in cause of default.


1. Surety.

2. Creditor.

3. Principal Debtor.


Example :- Mr. Bean takes a loan of Rs. 10,000 from City Bank, and Mr. Riz gives guarantee of repayment of loan. Here Mr. Bean is the principal debtor. City Bank is creditor and Mr. Riz is a surety.

Consideration Case :-
"Anything done, or any promise made for the benefit of the principal debtor may be sufficient consideration to the surety for giving the guarantee."