Home › CA Foundation › businesslaw › Contract of Indemnity and Guarantee › Under Section 127, with respect to consideration…
Under Section 127, with respect to consideration for a guarantee:
ANo consideration is ever required
BPast consideration is sufficient
CAnything done for the benefit of the principal debtor is sufficient consideration for the surety
DThere must be direct consideration between surety and creditor
Answer & Solution
Correct answer: C. Anything done for the benefit of the principal debtor is sufficient consideration for the surety
Section 127 makes a benefit conferred on the principal debtor sufficient consideration for the surety's promise; past consideration is not good consideration here.
Related questions
Under Section 146, in the absence of a contrary agreement, co-sureties for the same debt aUnder Section 141, a surety is entitled to the benefit of every security the creditor holdOn paying the guaranteed debt, the surety acquires all the rights the creditor had againstUnder Section 139, if the creditor does an act inconsistent with the surety's rights, or oUnder Section 137, mere forbearance by the creditor to sue the principal debtor:Under Section 135, a contract by which the creditor compounds with, gives time to, or promUnder Section 134, the surety is discharged when the creditor:Under Section 133, a variance in the terms of the contract between creditor and principal