A โcontract of guaranteeโ 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 โsuretyโ; the person in respect of whose default the guarantee is given is called the โprincipal debtorโ; and the person to whom the guarantee is given is called the โcreditorโ. A guarantee may be either oral or written. (Section 126 of the Indian Contract Act, 1872) A guarantee which extends to a series of transactions is called a โcontinuing guaranteeโ.
**COUNTER GUARANTEE FIDELITY GUARANTEE PERFORMANCE GUARANTEE** A โcontract of guaranteeโ 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 โsuretyโ; the person in respect of whose default the guarantee is given is called the โprincipal debtorโ; and the person to whom the guarantee is given is called the โcreditorโ. A guarantee may be either oral or written. (Section 126 of the Indian Contract Act, 1872) A guarantee which extends to a series of transactions is called a โcontinuing guaranteeโ. A guarantee, guaranteeing an employer against the misconduct of an employee or to answer for the debt or default of another, is called a โfidelity guaranteeโ. A guarantee given by the principal debtor to the surety providing him continuing indemnity against any loss or damage that the surety may suffer on account of default on the part of the principal debtor, is called โcounterguaranteeโ. A guarantee which ensures the contracted performance of another person and under which the surety undertakes to compensate the person in whose favour the guarantee is given, in the event of failure on the part of the person on whose behalf the guarantee is given, is known as โperformance guaranteeโ. Thanks