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1The Contract Act, 1872

( ACT NO. IX OF 1872 )

Chapter VIII

OF INDEMNITY AND GUARANTEE

Consideration for guarantee
127. 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 defaults 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.

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    Throughout this Act, except otherwise provided, the words "Bangladesh", "Taka" and "Penal Code" were substituted, for the words "Pakistan" or "East Pakistan", "Rupees" or "Rs." and "Pakistan Penal Code" respectively by section 3 and 2nd Schedule of the Bangladesh Laws (Revision And Declaration) Act, 1973 (Act No. VIII of 1973).
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