A stands surety for Z for payment of a sum of Rs 1 lakh to B. Z defaults in payment. A is liable to make the payment to B
Verified Answer
A. A is not liable to make any payment to B
B. Z is liable to pay to A to enable him to pay to B
C. Of a sum of Rs 1,00,000/-
D. None of the above
Explanation:
In a contract of guarantee, the liability of the surety (A) is co-extensive with that of the principal debtor (Z). When Z defaults in payment, A becomes immediately liable to the creditor (B) for the guaranteed sum, which is Rs. 1 lakh in this case.