Question

A contract to perform the promise or discharge the liability of a third person in case of his default - is a contract of

• A. Guarantee
• B. Default
• C. Indemnity
• D. Partnership

Hint:

Direct definitional questions are common in law exams. It is highly beneficial to be familiar with the exact wording of key definitions from the bare acts, such as the definitions of guarantee, indemnity, bailment, and pledge.

Answer 1

The Correct Option is A

Step 1: Understanding the Concept:
The question provides a definition and asks to identify the corresponding type of contract from the Indian Contract Act, 1872.
Step 2: Detailed Explanation:
The definition provided is: "A contract to perform the promise, or discharge the liability, of a third person in case of his default".
This is the precise legal definition of a "Contract of Guarantee" as given in Section 126 of the Indian Contract Act.
The section identifies three parties in such a contract:
1. Surety: The person who gives the guarantee.
2. Principal Debtor: The person in respect of whose default the guarantee is given.
3. Creditor: The person to whom the guarantee is given.
The definition in the question perfectly matches this legal concept. It is not a contract of indemnity, which involves a promise to save someone from loss, nor is it a partnership. "Default" is an event, not a type of contract.
Step 3: Final Answer:
The question directly quotes the definition of a contract of guarantee. Therefore, option (A) is the correct answer.