Vol.(14) 2026: IBPS’ Bank Law Officer Entrance/ Promotion Exam- (1-Liners: Guarantee)

Date of Upload:24.10.2026

1. True/ False: The provisions of Indian Contract Act, 1872 are also applicable to the guarantee given by the Banks which are performance guarantee, financial guarantee, advance payment guarantee and deferred payment guarantee etc—True.
2. “Contract of Guarantee” is defined under Section________of the Indian Contract Act, 1872—Section 126.
3. Under Indian Contract Act, 1872, a contract to perform the promise, or discharge the liability, of a third person in case of his default is called—Contract of Guarantee. [Section 126]
4. Under Indian Contract Act, 1872, the person who gives the guarantee is called the—Surety. [Section 126],
5. Under Indian Contract Act, 1872, the person in respect of whose default the guarantee is given is called the—Principal Debtor. [Section 126]
6. Under Indian Contract Act, 1872, the person to whom the guarantee is given is called the—Creditor. [Section 126]
7. True/ False: As per Indian Contract Act, 1872A guarantee may be either oral or written—True. [Section 126]
8. True/ False: A surety/ guarantor is regarded as “Favoured Debtor”—True.
9. Consideration for guarantee— True/ False: As per Indian Contract Act, 1872, anything done, or any promise made, for the benefit of the principal debtor, may be a sufficient consideration to the surety for giving the guarantee—True. [Section 127]
10. Surety’s liability— True/ False: As per Indian Contract Act, 1872, the liability of the surety is co- extensive with that of the principal debtor, unless it is otherwise provided by the contract—True. [Section 128]
11. The liability of the surety is co- extensive with that of the principal debtor, unless it is otherwise provided by the contract. It is so provided under Section______of the Indian Contract Act, 1872—Section 128.
12. Continuing guarantee—A guarantee which extends to a series of transactions, is called—Continuing Guarantee.
13. Section 129 of the Indian Contract Act, 1872 defines the expression—Continuing Guarantee.
14. True/ False: Under Indian Contract Act, 1872, mere forbearance on the part of the creditor to sue the principal debtor or to enforce any other remedy against him does not, in the absence of any provision in the guarantee to the contrary, discharge the surety—True. [Section 137]
15. Subrogation: Under Indian Contract Act, 1872, the right of the surety to recover his money from the Principal Debtor (PD) on settlement of the liabilities of PD with creditor is called—Subrogation.
16. Guarantee by misrepresentation—Under Indian Contract Act, 1872, any guarantee which has been obtained by means of misrepresentation made by the creditor, or with his knowledge and assent, concerning a material part of the transaction, is—Invalid [Section 143]
17. Guarantee by concealment— Under Indian Contract Act, 1872, any guarantee which the creditor has obtained by means of keeping silence as to material circumstances, is—Invalid [Section 144]
18. True/ False: Under Indian Contract Act, 1872, where a person gives a guarantee upon a contract that the creditor shall not act upon it until another person has joined in it as co-surety, the guarantee is not valid if that other person does not join—True. [Section 144]

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