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Section 145 - Implied promise to indemnify surety : Indian Contract Act 1872

 

What is Implied promise to indemnify surety? Section 145 of Indian Contract Act 1872

Section 145 of Indian Contract Act 1872 : "Implied promise to indemnify surety"

145. In every contract of guarantee there is an implied promise by the principal debtor to indemnify the surety; and the surety is entitled to recover from the principal debtor whatever sum he has rightfully paid under the guarantee, but no sums which he has paid wrongfully.

Illustrations
(a) B is indebted to C, and A is surety for the debt. C demands payment from A, and on his refusal sues him for the amount. A defends the suit, having reasonable grounds for doing so, but is compelled to pay the amount of the debt with costs. He can recover from B the amount paid by him for costs, as well as the principal debt.

(b) C lends B a sum of money, and A, at the request of B, accepts a bill of exchange drawn by B upon A to secure the amount. C, the holder of the bill, demands payment of it from A, and, on A's refusal to pay, sues him upon the bill. A, not having reasonable grounds for so doing, defends the suit, and has to pay the amount of the bill and costs. He can recover from B the amount of the bill, but not the sum paid for costs, as there was no real ground for defending the action.

(c) A guarantees to C, to the extent of 2,000 rupees, payment for rice to be supplied by C to B. C supplies to B rice to a less amount than 2,000 rupees, but obtains from A payment of the sum of 2,000 rupees in respect of the rice supplied. A cannot recover from B more than the price of the rice actually supplied.

 

INDIAN CONTRACT ACT 1872

Section 126 - Contract of guarantee surety principal debtor and creditor

Section 127 - Consideration for guarantee

Section 128 - Suretys liability

Section 129 - Continuing guarantee

Section 130 - Revocation of continuing guarantee

 

 

Section 131 - Revocation of continuing guarantee by suretys death

Section 132 - Liability of two persons, primarily liable, not affected by arrangement between them that one shall be surety on other's default

Section 133 - Discharge of surety by variance in terms of contract

Section 134 - Discharge of surety by release or discharge of principal debtor

Section 135 - Discharge of surety when creditor compounds with, gives time to, or agrees not to sue, principal debtor

 

 

Section 136 - Surety not discharged when agreement made with third person to give time to principal debtor

Section 137 - Creditors forbearance to sue does not discharge surety

Section 138 - Release of one co-surety does not discharge others

Section 139 - Discharge of surety by creditor's act or omission impairing surety's eventual remedy

Section 140 - Rights of surety on payment of performance

 

 

Section 141 - Suretys right to benefit of creditors securities

Section 142 - Guarantee obtained by misrepresentation invalid

Section 143 - Guarantee obtained by concealment invalid

Section 144 - Guarantee on contract that creditor shall not act on it until co-surety joins

Section 145 - Implied promise to indemnify surety

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