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Under section 129 of the Indian Contract Act, 1872, what distinguishes a continuing guarantee?

Section 129 defines a continuing guarantee by its extension to a series of transactions. The terms of the guarantee identify the series it covers.

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Under section 129 of the Indian Contract Act, 1872, what distinguishes a continuing guarantee?

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Answer and explanation

Correct answer B

Section 129 defines a continuing guarantee by its extension to a series of transactions. The terms of the guarantee identify the series it covers.

Option feedback

Option A

A guarantee restricted to one isolated transaction is not a continuing guarantee.

Option B

A series of transactions is the scope identified by the statutory definition.

Option C

Section 129 turns on whether the guarantee extends to a series. It does not require the transactions to predate the guarantee.

Option D

The definition does not extend the surety’s liability to transactions outside the guarantee.

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