Module: | Guarantee, Indemnity, and Bailment
Q12: In a contract of guarantee, the surety's liability is …… with that of the principal debtor, meaning the bank can recover the debt from the guarantor without first exhausting all remedies against the borrower.
✅ Correct Answer: A
As per Section 128 of the Indian Contract Act, the liability of the surety (guarantor) is co-extensive with that of the principal debtor.
This means the guarantor is liable for the full amount, and the bank (creditor) can proceed directly against the guarantor upon default without first suing the borrower.
This means the guarantor is liable for the full amount, and the bank (creditor) can proceed directly against the guarantor upon default without first suing the borrower.