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.
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.
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.