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The contract of guarantee is for protection of _______
- a)creditor
- b)debtor
- c)guarantor
- d)none of these
Correct answer is option 'A'. Can you explain this answer?
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The contract of guarantee is for protection of _______a)creditorb)debt...
Contract of Guarantee
- Definition: A contract of guarantee is a contract where one party, known as the guarantor, agrees to fulfill the obligations of another party, known as the debtor, in case the debtor fails to do so.
- Purpose: The main purpose of a contract of guarantee is to provide protection to the creditor in case the debtor is unable to fulfill their obligations.
- Role of Creditor: The creditor is the party to whom the debt is owed. The creditor benefits from the contract of guarantee as it ensures that they will receive payment even if the debtor defaults.
- Role of Debtor: The debtor is the party who owes the debt to the creditor. The debtor benefits from the contract of guarantee as it may help them secure a loan or conduct business transactions that they would otherwise not be able to do.
- Role of Guarantor: The guarantor is the party who agrees to fulfill the obligations of the debtor in case of default. The guarantor essentially acts as a safety net for the creditor, providing an additional layer of security in case the debtor fails to pay.
- Legal Protection: A contract of guarantee is legally binding and provides protection to all parties involved by clearly outlining the responsibilities and obligations of each party.
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The contract of guarantee is for protection of _______a)creditorb)debtorc)guarantord)none of theseCorrect answer is option 'A'. Can you explain this answer?
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