1.
Introduction
Literally
guarantee means a formal promise or assurance that certain conditions will be
fulfilled. As assurance that certain conditions will be fulfilled. As far as
contract law is concerned, such kind of guarantee is usually established
through a contract of guarantee. Under contract law, guarantee can be
classified into different kinds. One of its kinds one is continuing guarantee.
2.
Definition
Continuing
guarantee can be defined as a guarantee, which extends to a series of
continuing transactions. Generally, indefinite numbers of transactions are
dealt in continuing guarantee. Such guarantee can be in respect of future
transactions, which is to be conducted during fixed period of time.
3. Revocation of Continuing Guarantee
A
continuing guarantee can be revoked in any of the following ways:
i.
Through Notice
At
any time, a continuing guarantee about future transactions can be revoked by
the surety by notice to the creditor. Following points are important as far as
revocation of continuing guarantee through notice is concerned:
a.
Time of Notice
No
specific time has been provided under contract act for giving notice in respect
of revocation of continuing guarantee. Therefore, such notice can be given at
any time.
b.
Manner to Give Notice
Contract
law provides no specific manner for giving a notice about revocation of
continuing guarantee. Therefore, it is left for parties to choose the manner
for giving such notice.
c.
Notice by Surety
It
is essential that notice about revocation of continuing guarantee should be
given by surety.
d.
Notice to Creditor
It
is also necessary that notice about revocation of continuing guarantee should
be given to creditor.
f.
Future Transactions
As
far as revocation of continuing guarantee through notice is concerned, an
important point is that guarantee should be about future transaction.
ii.
Through Death
Continuing
guarantee can be revoked by death of surety. Following points are important as
far as revocation of continuing guarantee through death is concerned.
a.
Future transaction
As
far as revocation of continuing guarantee through surety’s death is concerned,
an important point is that guarantee should be about future transaction.
b.
Nature of Guarantee-Contract
Revocation
of continuing guarantee through surety’s death greatly depends upon nature of guarantee-contract.
If it is incorporated into guarantee-contract that continuing guarantee will be
revoked with the death of surety, then continuing guarantee is revoked at the
surety’s death. Contrary to this, if such condition is not incorporated into
the guarantee-contract, then continuing guarantee remains continued even after
death of surety.
c.
Obligations f Representatives of Deceased Surety
When
continuing guarantee remains continued after death of surety, representatives
of deceased surety are under obligation to fulfill obligation of deceased
surety.
Conclusion
To
conclude, it can be stated that continuing guarantee can be revoked either
through notice to creditor or though surety’s death only when guarantee is
about some future transaction. In absence of guarantee about some future
transaction, continuing guarantee cannot be revoked through notice to creditor
or though surety’s death.
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