ICA Section 127: Consideration for guarantee
Indian Contract Act, 1872 · Chapter 8: Indemnity and Guarantee
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127. Consideration for guarantee. Anything done, or any promise made, for the benefit of the principal debtor, may be a sufficient consideration to the surety for giving the guarantee.
Illustrations
(a) B requests A to sell and deliver to him goods on credit. A agrees to do so, provided C will guarantee the payment of the price of the goods. C promises to guarantee the payment in consideration of A's promise to deliver the goods. This is a sufficient consideration for C's promise.
(b) A sells and delivers goods to B. C afterwards requests A to forbear to sue B for the debt for a year, and promises that, if he does so, C will pay for them in default of payment by B. A agrees to forbear as requested. This is a sufficient consideration for C's promise.
(c) A sells and delivers goods to B. C afterwards, without consideration, agrees to pay for them in default of B. The agreement is void.
Official reference: India Code, Legislative Department — checked: 29 September 2026.
This text is for reference, not legal advice. Consult the official source for the authoritative text.
Other sections in this chapter
- 124. "Contract of indemnity" defined
- 125. Rights of indemnity-holder when sued
- 126. "Contract of guarantee", "surety", principal debtor" and "Creditor"
- 128. Surety's liability
- 129. "Continuing guarantee"
- 130. Revocation of continuing guarantee
- 131. Revocation of continuing guarantee by surety's death
- 132. Liability of two persons, primarily liable, not affected by arrangement between them that one shall be surety in other's default
- 133. Discharge of surety by variance in terms of contract
- 134. Discharge of surety by release of discharge of principal debtor
- 135. Discharge of surety shen cerditor compounds with, gives time to, or agrees not to sue principal debtor
- 136. Surety not discharged when agreement made with third person to give time to principal debtor
- 137. Creditor's forbearance to sue does not discharge surety
- 138. Release of one co-surety does not discharge others
- 139. Discharge of surety by creditor's act or omission impairing surety's eventual remedy
- 140. Rights of surety on payment or performance
- 141. Surety's right to benefit of creditor's securities
- 142. Guarantee obtaiend by misrepresentation, invalid
- 143. Guarantee obtained by concealment, invalid
- 144. Guarantee on contract that creditor shall not act on it until co-sureties joins
- 145. Implied promise to indemnify surety
- 146. Co-sureties liable to contribute equally
- 147. Liability of co-sureties bound in different sums