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of <h1>Understanding Contract of Guarantee: Surety's Role in Principal Debtor's Liability Under Section 126 of Indian Contract Act, 1872.</h1> A contract of guarantee is an agreement where one party, the surety, commits to fulfilling the promise or settling the liability of a third party, known as the principal debtor, if they default. The individual to whom this guarantee is provided is referred to as the creditor. This type of contract can be established either orally or in writing, as outlined in Section 126 of the Indian Contract Act, 1872.
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