Section 132 Indian Contract Act 1872
Section 132 of the Indian Contract Act 1872 is about Liability of two persons, primarily liable, not affected by arrangement between them that one shall be surety on others default. It is under CHAPTER VIII of the Act. CHAPTER VIII is titled OF INDEMNITY AND GUARANTEE.
Liability of two persons, primarily liable, not affected by arrangement between them that one shall be surety on others default
Where two persons contract with a third person to undertake a certain liability, and also contract with each other that one of them shall be liable only on the default of the other, the third person not being a party to such contract, the liability of each of such two persons to the third person under the first contract is not affected by the existence of the second contract, although such third person may have been aware of its existence.
Illustration
A and B make a joint and several promissory note to C. A makes it, in fact, as surety for B, and C knows this at the time when the note is made. The fact that A, to the knowledge of C, made the note as surety for B, is no answer to a suit by C against A upon the note.
See also:
Section 131 Indian Contract Act 1872 (Revocation of continuing guarantee by surety‟s death)
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