https://www.taxtmi.com/caselaws?id=313580 The Bombay HC dismissed an application seeking to enforce a letter of comfort as a guarantee for loan repayment. The court held that while letters of comfort may constitute guarantees in certain circumstances, they must comply with Section 126 of the Contract Act, 1872. The document must be construed as a whole in commercial context, but cannot be altered to impose liability beyond what was undertaken. The court emphasized that nomenclature is irrelevant, but the guarantor's exact binding terms determine liability. Clear contractual terms cannot be modified through interpretation, and broad allegations of commercial misconduct are irrelevant in construction of commercial contracts between sophisticated parties. en-us Wed, 19 Aug 2020 00:00:00 +0530 Mon, 22 Apr 2024 20:41:49 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=313580 The Bombay HC dismissed an application seeking to enforce a letter of comfort as a guarantee for loan repayment. The court held that while letters of comfort may constitute guarantees in certain circumstances, they must comply with Section 126 of the Contract Act, 1872. The document must be construed as a whole in commercial context, but cannot be altered to impose liability beyond what was undertaken. The court emphasized that nomenclature is irrelevant, but the guarantor's exact binding terms determine liability. Clear contractual terms cannot be modified through interpretation, and broad allegations of commercial misconduct are irrelevant in construction of commercial contracts between sophisticated parties. Case-Laws Indian Laws Wed, 19 Aug 2020 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=313580