oresen tation
Or
Contract
Topic - I||
Act, a
pistinction between Indemnity and Guaran
n made by theguar.
ning a materialcredi-
tee'
143partof
Je of section In a Contact of indemnity there are two parties.
1)
by means of k
They are: (1) indemnifier (promisor), and (2) indemnified (prom
nvalid.
keep- isee).
In a Contract of Guarantee there are three parties.
y for him. B fails They are: (1) Creditor, (2) Principal Debtor, and (3) Surety
onsequence calls
ing. Cgives his 2. In a Contract of Indemnity, there is only one contract,
nform C with B's i.e., between the indemnifier and the indemnified.
he guarantee is
There are three contracts in a Contract of Guarantee. They
are:
be supplied by
(a) between the principal debtor and the creditor;
have privately
nd the market (b) between the creditor and the surety: and
(c) between the surety and the principal debtor (It is an
F an old debt.
implied contract).
e as a surety.
3) In a Contract of Indemnity, the liability of the indemni
(1912) 2 KB
fier is primary and independent.
er the fidelity
nfor dishon In a Contract of Guarantee the surety's liability is sec
ervant com ondary or collateral. It arises only on default of the principal
not liable. debtor.
4) In a Contract of Indemnity, the liability of the indemni
fier arises only on the happening of a contingency.
9
Contract of Guarantee,
In a the liability of surety is not
contingent but subsisting.
5) A Contact of Indemnity is made for the reimbursement
of loss.
A Contract of Guarantee is made to provide necessary
Security to the creditor against his advance.
