Question

A person who gives the guarantee is called

• A. Bailee
• B. Creditor
• C. Debtor
• D. Surety

Hint:

To remember the parties in a guarantee: The Debtor owes a debt, the Creditor is owed the debt, and the Surety makes sure the creditor gets paid if the debtor defaults.

Answer 1

The Correct Option is D

Step 1: Understanding the Concept:
A contract of guarantee involves three distinct parties, each with a specific role and name.

Step 2: Detailed Explanation:
As per Section 126 of the Indian Contract Act, 1872, the parties to a contract of guarantee are:
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.
A "Bailee" is a party to a contract of bailment, who is given temporary possession of goods. A "Debtor" and "Creditor" are the primary parties to a contract of loan or credit. In the specific context of a guarantee, the one providing the guarantee is the "Surety".

Step 3: Final Answer:
The person who gives the guarantee is called the Surety.