Transfer of Property Act Section 133 — Warranty of solvency of debtor

CHAPTER VII OF GIFTS

General

Summary

If someone transfers a debt to you and promises that the debtor is solvent, that promise only covers the debtor’s financial condition at the exact time of the transfer. Unless the agreement says otherwise, this promise does not cover the debtor’s future solvency. Also, if you paid for the debt, the promise is limited to the amount you paid or the value of what you gave in exchange.

Official Text

Where the transferor of a debt warrants the solvency of the debtor, the warranty, in the absence of a contract to the contrary, applies only to his solvency at the time of the transfer, and is limited, where the transfer is made for consideration, to the amount or value of such consideration.