Section 111 The Indian Contract Act, 1872
Section 111 of the Indian Contract Act, 1872 deals with revocation of continuing guarantee.
📜 Section 111 – Revocation of continuing guarantee
"A continuing guarantee may at any time be revoked by the surety, as to future transactions, by notice to the creditor."
✅ Explanation:
A continuing guarantee is a type of guarantee that applies to a series of transactions.
Revocation means the act of withdrawing or canceling the guarantee.
As per Section 111, the surety (the person giving the guarantee) can revoke the guarantee at any time for future transactions, by giving notice to the creditor.
However, this revocation does not affect past transactions or obligations already undertaken before the notice.
🧾 Illustration:
Suppose A guarantees B’s goods supplied on credit to C, up to ₹1,00,000. If A gives notice to revoke the guarantee, he will not be liable for goods supplied after the notice, but he remains liable for the goods supplied before the notice.
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