Brief Notes on “Contract of Guarantee” (Indian Contract Act)
A contract of guarantee has three parties creditor, principal debtor and the surety.
(1) An agreement between creditor and principal debtor.
(2) Agreement between surety and creditor.
(3) Agreement between surety and principal debtor. In contract of guarantee actual beneficiary is the principal debtor.
Contract Act also discusses the issue of Bailment. The person delivering the goods is the Bailor. The person whom it is delivered is called Bailee. The transaction is Bailment.