What is Section 128 of the contract Act?
Asked by: scraper | Last update: July 31, 2026Score: 0/5 (0 votes)
128. The liability of the surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract.
What is 128 of the Contract Act?
Surety's Liability: Section 128 of Indian Contract Act, 1872
The principal debtor is a person who obligates himself by a surety, a person is bound absolutely and individually for the performance of all the obligations of the principal debtor.
What are the liabilities of a surety?
Under the Indian Contract Act, 1872, a surety's liability is generally co-extensive with the principal debtor (Section 128), meaning they are liable immediately upon default, without the creditor needing to sue the debtor first.
What is the liability of the guarantor in a contract of guarantee as per Section 128?
Section 128 of the ICA establishes that, unless otherwise agreed, the liability of a surety is co-extensive with that of the principal debtor—meaning the guarantor is liable to the same extent and at the same time as the borrower.
What is Section 128 of the CPC?
Section 128 – Matters for which rules may provide
Such rules shall be not inconsistent with the provisions in the body of this Code, but, subject thereto, may provide for any matters relating to the procedure of Civil Courts.
Nature of Surety's Liability | Section-128 | Contract of Guarantee (Contract Act 1872)
What is Article 128 in simple words?
Article 128 of Indian Constitution empowers the Chief Justice of India (CJI) to request retired judges from the Supreme Court or High Courts to serve as temporary judges of the Supreme Court.
What is the punishment for 128 IPC?
Whoever, being a public servant and having the custody of any State prisoner or prisoner of war, voluntarily allows such prisoner to escape from any place in which such prisoner is confined, shall be punished with imprisonment for life, or imprisonment of either description for a term which may extend to ten years, and ...
Is the guarantor legally responsible?
Being a guarantor for a rental property involves you vouching for the tenant. If the tenant is unable to meet their obligations under the tenancy agreement, you (the guarantor) will be legally bound to pay out – either for overdue rent or damage to the property.
What are the three types of guarantees?
The three types of guarantees are personal guarantees (individual liability), bank guarantees (bank-backed assurance) and performance guarantees (ensuring contractual obligations are met). Each serves to mitigate financial or performance risks.
What is the Supreme Court Judgement on guarantor?
The Supreme Court has held that for a valid contract of guarantee under Section 126 of the Indian Contract Act, it is not necessary for the guarantor to derive a direct benefit from the transaction; it suffices if the principal debtor benefits.
Can a surety be sued?
This means that the surety's obligations are equal to those of the principal debtor and the surety will be jointly and severally liable to the creditor. A creditor can institute action directly against the co-principal debtor without having to first claim from the principal debtor.
What is an example of a surety liability?
Example: S guarantees to C the payment of a bill of exchange by P, the acceptor. The bill is dishonoured by P. S is liable not only for the amount of the bill but also for any interest and charges which may have become due on it. Co-Extensive: The surety is liable for what the principal debtor is liable.
What does it mean to be liable as surety?
Definition. A surety is a financial arrangement where one party guarantees the debts or obligations of another, ensuring these are fulfilled if the primary party fails to do so.
What makes a contract hold up in court?
For a contract to be legally binding and enforceable (which allows someone to sue in court), there must be: A mutual agreement: Both sides must agree to be bound by their contract and must agree on the essential terms. Consideration: Each party to a contract must give something of value to the other.
What are the rights of surety in a contract of guarantee?
In every contract of guarantee there is an implied promise by the principal debtor to indemnify the surety; and the surety is entitled to recover from the principal debtor whatever sum he has rightfully paid under the guarantee, but no sums which he has paid wrongfully.
What is a reasonable time for completing a contract?
Reasonable time is that amount of time which is fairly necessary, conveniently, to do whatever is required to be done, as soon as circumstances permit.
What are the four types of contracts?
The four common types of contracts include:
- Non-Disclosure Agreements (NDAs) – establish confidentiality protocols.
- Master Service Agreements (MSAs) – define overarching service terms.
- Order Forms or Purchase Orders – govern specific transactions.
- Buy-Side Contracts – regulate procurement and supplier relationships.
Who are the three parties involved in a guarantee?
1. The person who gives the guarantee is called the Surety 2. The person on whose default the guarantee is given is called the Principal Debtor 3. The person to whom the guarantee is given is called the Creditor.
What are the 7 principles of a contract?
For a contract to be valid and recognized by the common law, it must include certain elements-- offer, acceptance, consideration, intention to create legal relations, authority and capacity, and certainty. Without these elements, a contract is not legally binding and may not be enforced by the courts.
What not to say to your landlord?
Certain things are better left unsaid, such as...
- 'I hate my current landlord' Every potential landlord is going to ask why you're moving. ...
- 'Let me ask you one more question' ...
- 'I can't wait to get a puppy' ...
- 'My partner works right up the street' ...
- 'I move all the time'
Does a guarantor have rights to property?
They don't have any rights to the property and are only contacted if the tenant defaults on their rent or other financial lease obligations. A guarantor's duty is to step in and cover the costs that the tenant failed to pay.
Can a family member be a guarantor?
You only need a guarantor if you're applying for a passport for the first time or you aren't eligible to renew your passport. As long as they meet these requirements, your guarantor can be anyone, including a family member or member of your household.