Contracts Act 1950 · Updated to 1 Jan 2006 · Part VIII · Of Indemnity and Guarantee
80. Consideration for guarantee
Feedback & supportAnything done, or any promise made, for the benefit of the principal debtor may be a sufficient consideration to the surety for giving the guarantee.
B requests A to sell and deliver to him goods on credit. A agrees to do so, provided C will guarantee the payment of the price of the goods, C promises to guarantee the payment in consideration of A’s promise to deliver the goods.
This is a sufficient consideration for C’s promise.
A sells and delivers goods to B. C afterwards requests A to forbear to sue
B for the debt for a year and promises that, if he does so, C will pay for them in default of payment by B. A agrees to forbear as requested. This is a sufficient consideration for C’s promise.
A sells and delivers goods to B. C afterwards, without consideration, agrees to pay for them in default of B. The agreement is void.