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Section 126, Contract Act 1872: Contract Of Guarantee, Surety, Principal Debtor & Creditor

Section 126 under the Chapter VIII (Of indemnity and guarantee) of the Contract Act, 1872 of India - "Contract of guarantee", "surety", "principal debtor" and "creditor", is reproduced hereunder:—

“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.”

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