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ICA Chapter 8: Indemnity and Guarantee

Plain-language guide

What this part covers

Chapter VIII distinguishes indemnity from guarantee and then sets out the rights and liabilities of the indemnity-holder, surety, principal debtor and creditor. It also deals with continuing guarantees, variance, discharge, securities and contribution between co-sureties.

Key provisions

  1. Section 124. "Contract of indemnity" defined
  2. Section 125. Rights of indemnity-holder when sued
  3. Section 126. "Contract of guarantee", "surety", principal debtor" and "Creditor"
  4. Section 127. Consideration for guarantee
  5. Section 128. Surety's liability
  6. Section 129. "Continuing guarantee"
  7. Section 130. Revocation of continuing guarantee
  8. Section 131. Revocation of continuing guarantee by surety's death
  9. Section 132. Liability of two persons, primarily liable, not affected by arrangement between them that one shall be surety in other's default
  10. Section 133. Discharge of surety by variance in terms of contract
  11. Section 134. Discharge of surety by release of discharge of principal debtor
  12. Section 135. Discharge of surety shen cerditor compounds with, gives time to, or agrees not to sue principal debtor
  13. Section 136. Surety not discharged when agreement made with third person to give time to principal debtor
  14. Section 137. Creditor's forbearance to sue does not discharge surety
  15. Section 138. Release of one co-surety does not discharge others
  16. Section 139. Discharge of surety by creditor's act or omission impairing surety's eventual remedy
  17. Section 140. Rights of surety on payment or performance
  18. Section 141. Surety's right to benefit of creditor's securities
  19. Section 142. Guarantee obtaiend by misrepresentation, invalid
  20. Section 143. Guarantee obtained by concealment, invalid
  21. Section 144. Guarantee on contract that creditor shall not act on it until co-sureties joins
  22. Section 145. Implied promise to indemnify surety
  23. Section 146. Co-sureties liable to contribute equally
  24. Section 147. Liability of co-sureties bound in different sums

Study check

Check indemnity and guarantee

Choose an answer, then check it. Scoring stays in your browser and every explanation links to the statutory text.

  1. 1.Which three roles does section 126 name in a guarantee?
  2. 2.What is the general effect under section 133 of an unconsented variance in the contract between creditor and principal debtor?

Official reference: India Code, Legislative Department — checked: 29 September 2026.