CMA Foundation · Fundamentals of Business Laws and Business Communication · Meaning of Indemnity, Guarantee, Pledge, Agent
Under the Indian Contract Act, 1872, a guarantee which extends to a series of transactions is called:
A guarantee that extends to a series of transactions is called a continuing guarantee under Section 129 of the Indian Contract Act, 1872. It is not tied to one single transaction, so it can cover several dealings between the creditor and the principal debtor.
- AA specific guarantee
- BA continuing guaranteeCorrect
- CA contingent guarantee
- DA collateral guarantee
Explanation
Section 129 defines a continuing guarantee as one that extends to a series of transactions. A specific guarantee covers a single transaction. 'Contingent' and 'collateral' guarantee are not the statutory terms for this idea.
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