Consideration for guarantee
Chapter 9: Of indemnity and 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.
The Indian Contract Act, 1872 (Act No. 9 of 1872). From the updated text on India Code, with later amendments. Being checked against the official copy; amendment notes are not shown yet.