Is Guarantee obtained by concealment invalid? Section 143 of Indian Contract Act 1872
143. Any guarantee which the creditor has obtained by means of keeping silence as to material circumstances is invalid.
(a) A engages B as a clerk to collect money for him. B fails to account for some of his receipts, and A in consequence calls upon him to furnish security for his duly accounting. C gives his guarantee for B's duly accounting. A does not acquaint C with B's previous conduct. B afterwards makes default. The guarantee is invalid.
(b) A guarantees to C payment for iron to be supplied by him to B to the amount of 2,000 tons. B and C have privately agreed that B should pay five rupees per ton beyond the market price, such excess to be applied in liquidation of an old debt. This agreement is concealed from A. A is not liable as a surety.
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