143. Guarantee obtained by concealment, invalid.
Any guarantee which the creditor has obtained by means of keeping silence as to material circumstances, is invalid.
Illustrations-
(a) A engages B as clerk to collect money for him. B fails to account for some of his receipts and A in consequence call upon him to furnish security for his duly accounting. C gives his guarantee for B’s duly accounting. A does not acquaint C with B’s previous conduct. B afterwards makes default. The guarantee is invalid.
(b) A guarantees to C payment for iron to be supplied by him to B to the amount of 2,000 tons. B and C have privately agreed that B should pay five rupees per tone beyond the market price, such excess to be applied in liquidation of an old debt. This agreement is concealed from A. A is not liable as a surety.
Read Contract Act in a systematic way.
Read Contract Act each section wise.
Download beautiful, mobile friendly Contract Act PDF.
- Article 334A of the Constitution of India - 14th April 2024
- Article 332A of the Constitution of India - 14th April 2024
- Article 330A of the Constitution of India - 14th April 2024
