Indian Contract Act,1872

Act No : 9

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Section : Revocation of continuing guarantee

130.Revocation of continuing guarantee.-A continuing guaranteemay at any time be revoked by the surety,as to future transactions, bynotice to the creditor. Illustrations (a) A, in consideration of B's discounting, at A's request,bills of exchange for C, guarantees to B, for twelve months, the duepayment of all such bills to the extent of 5,000 rupees. Bdiscounts bills for C to the extent of 2,000 rupees. Afterwards, atthe end of three months, A revokes the guarantee. This revocationdischarges A from all liability to B for any subsequent discount. ButA is liable to B for the 2,000 rupees, on default of C. (b) A guarantees to B, to the extent of 10,000 rupees, that Cshall pay all the bills that B shall draw upon him. B draws upon C. Caccepts the bill. A gives notice of revocation. C dishonours thebill at maturity. A is liable upon his guarantee.

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