Question

Which of the following is not an essential of a Contract of Guarantee

• A. Concurrence of three parties
• B. Surety's distinct promise to be answerable
• C. Liabilities to be legally enforceable
• D. Existence of only one contract

Hint:

A contract of guarantee involves three parties and two contracts: the principal contract and the guarantee agreement.

Answer 1

The Correct Option is D

Step 1: Understanding the Essentials of a Contract of Guarantee.
A contract of guarantee requires three essential parties: the creditor, the principal debtor, and the surety. The contract involves a promise by the surety to pay the debt or fulfill the obligation of the principal debtor if they default.

Step 2: Explanation of Other Options.
- (a) A guarantee requires the concurrence of three parties: the creditor, principal debtor, and surety. - (b) Surety's distinct promise to answer for the debt or obligation of the principal debtor is a key requirement. - (c) The liability in a contract of guarantee is legally enforceable.

Step 3: Conclusion.
The existence of only one contract is not a necessary condition in a contract of guarantee. A contract of guarantee inherently involves more than one contract: the principal contract and the contract of guarantee.