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Under Section 126 of the Indian Contract Act, 1872, a contract of guarantee:

Section 126 of the Indian Contract Act, 1872 defines a 'contract of guarantee', 'surety', 'principal debtor', and 'creditor', and expressly concludes: 'A guarantee may be…

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Under Section 126 of the Indian Contract Act, 1872, a contract of guarantee:

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Answer and explanation

Correct answer C

Section 126 of the Indian Contract Act, 1872 defines a 'contract of guarantee', 'surety', 'principal debtor', and 'creditor', and expressly concludes: 'A guarantee may be either oral or written.' Thus, in India, a contract of guarantee can be oral or in writing.

Option feedback

Option A

Incorrect. Unlike English law under the Statute of Frauds, Indian law under Section 126 of the Indian Contract Act, 1872 does not require a contract of guarantee to be in writing only.

Option B

Incorrect. A guarantee is not restricted to oral form; Section 126 expressly states that a guarantee may be either oral or written.

Option C

Correct. The last sentence of Section 126 of the Indian Contract Act, 1872 expressly provides: 'A guarantee may be either oral or written.'

Option D

Incorrect. Neither writing nor compulsory registration is required for a valid contract of guarantee under Section 126 of the Indian Contract Act, 1872.

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