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contract of guarantee
a contract of guarantee is a contract to perform the promise , or discharge the liability , of a third person in case of latter's default. a guarantee may be either oral or written.

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
the person to whom the guarantee is given is called the creditor/beneficiary

liability of the surety
it means if borrwer failed to pay the guarantor has to pay the remaining amount.

a guarantee which extends to a series of transactions is called continuing guarantee. this type of guarantee is not limited to only one transaction but to many transactions.

*when the information of a guarantor's death is recevied , banks prefer to break the running accounts of a borrower

*any change/modification made without the surety's consent, in the terms of contract guaranteed by him, between the principal debtor and the creditor discharges the surety as to transactions subsequent to the variance.

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