What are Contracts Of Indemnity and Guarantee?
Legal

What are Contracts Of Indemnity and Guarantee?

Contracts of indemnity and guarantee are special agreements covered by the Indian Contract Act of 1872. In a contract of indemnity, one person promises to compensate another for losses. In a contract of guarantee, three people are involved: a third person steps in to pay the debt if the debtor fails. Both types of contracts help protect creditors when a third party does not fulfil its obligations. Chapter VIII of the Act provides the rules for these contracts in India.

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