Module: | Guarantee, Indemnity, and Bailment
Q14: For a continuing guarantee, such as one covering a Cash Credit (CC) or Overdraft (OD) limit, which event will revoke the guarantee for all future transactions?
✅ Correct Answer: B
As per Section 131 of the Indian Contract Act, the death of the surety acts as a revocation of a continuing guarantee for all future transactions, effective from the moment the bank (creditor) has notice of the death.
The surety's estate remains liable for advances made prior to the notice of death.
The surety's estate remains liable for advances made prior to the notice of death.