Indian Contract Act Section 142 — Guarantee obtained by misrepresentation invalid

CHAPTER VIII OF INDEMNITY AND GUARANTEE

Commercial / Corporate

Summary

A guarantee is invalid if it was obtained through a misrepresentation made by the creditor, or made with the creditor's knowledge and approval, about a material part of the transaction. In other words, if the person asking for the guarantee (the creditor) lies or hides something important about the deal, or lets someone else do so with their consent, the guarantee cannot be enforced.

Official Text

Any guarantee which has been obtained by means of misrepresentation made by the creditor, or with his knowledge and assent, concerning a material part of the transaction, is invalid.