Which of the following is not an essential of a Contract of Guarantee
Show Hint
- Concurrence of three parties
- Surety's distinct promise to be answerable
- Liabilities to be legally enforceable
- Existence of only one contract
The Correct Option is D
Solution and Explanation
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.
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