A contract of guarantee is required to be in writing according to the relevant Laws. A person cannot sue a person who guarantees another person to do or not do an act if not written. You can't sue a person on the ground that he made a promise to answer for the debt of anther where such person is unable to pay; unless such agreement is evidenced in writing and signed by such person.


For a contract to be a contract of guarantee, it must involve 3 parties.
1. Creditor
2. Principal Debtor
3. A promisor who undertakes to pay or discharge the debt of the debtor fails to discharge it.


In a contract of guarantee; the fact that the guarantor guarantee to pay does not mean that the debtor is no longer liable, he continues to be liable; but where he cannot discharge such liability or run away or fails to pay then the guarantee is held liable to pay.

A contract of guarantee is an assurance to the creditor that if the debtor fails to pay, the guarantor or surety will pay the debt. It must be noted that her there is any alteration of the said contract f guarantee between only the creditor and the debtor; without the guarantor knowing of such alteration and his consent is not sought and given then such guarantor is discharged from contract; unless it is proved that the said alteration is not substantial and is not prejudicial to the interest of the guarantor.




Difference between. Contract Of Guarantee and Contract Of Indemnity


Where the effect of the guarantor's assumption of liability is to determine the principal debtor's liability then what we have is not a contract of Guarantee but a contract of Indemnity.

Where it is a contract of indemnity, such indemnity is enforceable in the .......................... Read More, Visit www.legalify.ng/blog