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1The Contract Act, 1872

( ACT NO. IX OF 1872 )

Chapter VIII

OF INDEMNITY AND GUARANTEE

"Continuing guarantee"
129. A guarantee which extends to a series of transactions is called a "continuing guarantee".
 
 
 
 
Illustrations
 
 
 
 
(a) A, in consideration that B will employ C in collecting the rent of B's zamindari, promises B to be responsible, to the amount of 5,000 Taka, for the due collection and payment by C of those rents. This is a continuing guarantee.
 
 
(b) A guarantees payment to B, a tea-dealer, to the amount of £ 100, for any tea he may from time to time supply to C. B supplies C with tea to above the value of £ 100, and C pay B for it. Afterwards B supplies C with tea to the value of £ 200. C fails to pay. The guarantee given by A was a continuing guarantee, and he is accordingly liable to B to the extent of £ 100.
 
 
 
 
(c) A guarantees payment to B of the price of five sacks of flour to be delivered by B to C and to be paid for in a month. B delivers five sacks to C. C pays for them. Afterwards B delivers four sacks to C, which C does not pay for. The guarantee given by A was not a continuing guarantee, and accordingly he is not liable for the price of the four sacks.

  • 1
    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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