Section 129 The Indian Contract Act, 1872
Section 129 of the Indian Contract Act, 1872 states:
Section 129 – “Continuing guarantee”
A guarantee which extends to a series of transactions is called a continuing guarantee.
Explanation:
A continuing guarantee is not limited to a single transaction. It covers multiple or successive transactions over a period of time, until it is revoked.
Illustration:
A guarantees to B, to the extent of ₹10,000, that C will pay for all the goods he buys from B over the next six months. This is a continuing guarantee.
If C keeps buying goods on credit, A remains liable (up to ₹10,000) until:
The guarantee is revoked,
The limit is exhausted, or
The time period ends.
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