CAF-4 · Chapter 11 · Question 1 of 10
A contract of guarantee is a contract to perform the promise, or discharge the liability, of a third person in case of his:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Default.
Explanation
Section 126 defines a contract of guarantee as a contract to perform the promise or discharge the liability of a third person in case of his default.
More Indemnity and guarantee MCQs
- Q3A contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct…
- Q4In a contract of indemnity, there are ________ parties, whereas in a contract of guarantee, there are ________ parties.
- Q5The liability of the surety is 'co-extensive' with that of the principal debtor. This means:
- Q6A guarantee which extends to a series of transactions is called a:
- Q7A continuing guarantee may at any time be 'revoked' by the surety, as to future transactions, by: