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Under a contract of guarantee:
- a)if principal debtor is not liable, guarantor is not liable
- b)if principal debtor is not liable, guarantor is liable
- c)if principal debtor is liable, guarantor is liable
- d)all the above
Correct answer is option 'C'. Can you explain this answer?
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Under a contract of guarantee:a)if principal debtor is not liable, gua...
Contract of Guarantee
- Principal Debtor's Liability: In a contract of guarantee, the guarantor agrees to pay the debt or fulfill the obligation of the principal debtor in case the latter fails to do so.
- Guarantor's Liability: If the principal debtor is found to be liable and fails to fulfill their obligation, the guarantor becomes liable to fulfill the debt or obligation on behalf of the principal debtor.
- Non-Liability of Principal Debtor: If the principal debtor is not liable, then the guarantor is also not liable as there is no debt or obligation to fulfill in such a scenario.
- Liability of Guarantor: The guarantor's liability is contingent upon the liability of the principal debtor. If the principal debtor is found liable and fails to fulfill their obligation, then the guarantor becomes liable to fulfill the debt or obligation.
Therefore, in a contract of guarantee, the liability of the guarantor is directly linked to the liability of the principal debtor. If the principal debtor is liable, then the guarantor is also liable to fulfill the debt or obligation. On the other hand, if the principal debtor is not liable, then the guarantor is also not liable to fulfill any debt or obligation.
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Under a contract of guarantee:a)if principal debtor is not liable, gua...
Understanding a Contract of Guarantee
In a contract of guarantee, the relationship between the principal debtor, the guarantor, and the creditor is crucial in determining liability.
Key Principles of Guarantee
- Principal Debtor's Liability: The principal debtor is the primary party responsible for fulfilling the obligation.
- Guarantor's Role: The guarantor provides a secondary assurance to the creditor that the obligation will be met.
Option Analysis
- Option A: If the principal debtor is not liable, the guarantor is not liable.
- This is incorrect because the guarantor's liability arises only if the principal debtor is liable.
- Option B: If the principal debtor is not liable, the guarantor is liable.
- This is also incorrect. If the principal debtor is not liable, the guarantor cannot be held liable.
- Option C: If the principal debtor is liable, the guarantor is liable.
- This is the correct option. The guarantor’s obligation is contingent upon the principal debtor’s liability. If the principal debtor defaults, the guarantor is legally bound to fulfill the obligation.
Conclusion
In summary, the correct understanding is that the guarantor's liability is directly linked to the principal debtor’s liability. If the principal debtor is found liable for a debt or obligation, the guarantor must fulfill that obligation as well, reinforcing the security the creditor has over the transaction.
In a contract of guarantee, the relationship between the principal debtor, the guarantor, and the creditor is crucial in determining liability.
Key Principles of Guarantee
- Principal Debtor's Liability: The principal debtor is the primary party responsible for fulfilling the obligation.
- Guarantor's Role: The guarantor provides a secondary assurance to the creditor that the obligation will be met.
Option Analysis
- Option A: If the principal debtor is not liable, the guarantor is not liable.
- This is incorrect because the guarantor's liability arises only if the principal debtor is liable.
- Option B: If the principal debtor is not liable, the guarantor is liable.
- This is also incorrect. If the principal debtor is not liable, the guarantor cannot be held liable.
- Option C: If the principal debtor is liable, the guarantor is liable.
- This is the correct option. The guarantor’s obligation is contingent upon the principal debtor’s liability. If the principal debtor defaults, the guarantor is legally bound to fulfill the obligation.
Conclusion
In summary, the correct understanding is that the guarantor's liability is directly linked to the principal debtor’s liability. If the principal debtor is found liable for a debt or obligation, the guarantor must fulfill that obligation as well, reinforcing the security the creditor has over the transaction.
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Under a contract of guarantee:a)if principal debtor is not liable, guarantor is not liableb)if principal debtor is not liable, guarantor is liablec)if principal debtor is liable, guarantor is liabled)all the aboveCorrect answer is option 'C'. Can you explain this answer?
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