i am confuse about Surety, creditor and Principal debtor........ Please provide me some suitable guud example so that i may clear the concept.......I am talking about indemnity and Guarantee chapter.....
thanks for your post in advance
Nitin Moudgil (~) (694 Points)
27 September 2008i am confuse about Surety, creditor and Principal debtor........ Please provide me some suitable guud example so that i may clear the concept.......I am talking about indemnity and Guarantee chapter.....
thanks for your post in advance
Rahul Gupta
(CA Final Student)
(1780 Points)
Replied 27 September 2008
Dear Nitin,
A "contract of guarantee" is a contract to perform the promise, or discharge the liability, of a third person in case of his default. The person who gives the guarantee is called the "surety", the person in respect of whose default the guarantee is given is called the "principal debtor", and the person to whom the guarantee is given is called the "creditor". A guarantee may be either oral or written.
For eg:
You have to take a loan from bank.
Then you would be a principal debtor because you want to take loan.
The bank would be a creditor as it provides loan.
But, as we know there is a requirement of guarantee for the purpose of loan. so your father who has a account in the bank and since he has a good relation with the bank or he has high repute gives gurantee that in case u make default in payment of loan...he shall pay the same..so he becomes surerty...!
I hope you are clear.
Regards
Rahul Gupta
Joshi Radhesh K.
( student of pcc)
(44 Points)
Replied 27 September 2008
| Originally posted by :Nitin Moudgil | ||
| " |
hi, dear igive u one example so u can uderstand it x borrowed money frm y and b give the suriety to y of x in this example x is principle debtor & y is creditor & b is suriety. |
" |
shailesh agarwal
(professional accountant)
(7642 Points)
Replied 17 January 2009
thanks joshi radhesh k
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