Indian Contract Act Section 127 — Consideration for guarantee
CHAPTER VIII OF INDEMNITY AND GUARANTEE
Commercial / Corporate
Summary
Anything done, or any promise made, for the benefit of the principal debtor, can count as valid consideration for the surety to give the guarantee. In other words, the guarantee does not need to benefit the surety directly; it is enough that the principal debtor gains some advantage from the action or promise.
Official Text
Anything done, or any promise made, for the benefit of the principal debtor, may be a sufficient consideration to the surety for giving the guarantee. Illustrations agreement is void.