Indian Contract Act,1872

Act No : 9

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Section : Consideration for guarantee

127.Consideration for guarantee.-Anything done, or any promisemade, for the benefit of the principal debtor, may be a sufficientconsideration to the surety for giving the guarantee. Illustrations (a) B requests A to sell and deliver to him goods on credit. Aagrees to do so, provided C will guarantee the payment of the price ofthe goods. C promises to guarantee the payment in consideration ofA's promise to deliver the goods. This is a sufficient considerationfor C's promise. (b) A sells and delivers goods to B. C afterwards requests A toforbear to sue B for the debt for a year, and promises that, if hedoes so, C will pay for them in default of payment by B. A agrees toforbear as requested. This is a sufficient consideration for C'spromise. (c) A sells and delivers goods to B. C afterwards, withoutconsideration, agrees to pay for them in default of B. The agreementis void.

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