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CS Executive · Jurisprudence, Interpretation and General Laws · Contract Law

Vikram gives a continuing guarantee to a supplier for goods to be sold on credit to Dev. Vikram dies after some supplies, and the supplier continues supplying afterwards. There is no contract to the contrary. Vikram's estate is liable:

The estate is liable only for supplies made before Vikram's death. Under section 131, absent a contrary contract, the surety's death revokes a continuing guarantee as regards future transactions, but earlier transactions remain covered.

  1. AFor all supplies, past and future
  2. BFor none of the supplies, since death ends the guarantee entirely
  3. COnly for transactions before Vikram's death, as death revokes the continuing guarantee for future transactionsCorrect
  4. DOnly for supplies made after his death

Explanation

Section 131 provides that, absent a contrary contract, the surety's death revokes a continuing guarantee so far as future transactions are concerned. Past transactions remain covered, so the 'none' option is wrong, and later supplies are not covered.

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