Section 114 The Indian Contract Act, 1872
Section 114 of the Indian Contract Act, 1872 deals with the revocation of continuing guarantee by surety's death.
🔹 Section 114 – Revocation of continuing guarantee by surety’s death
"The death of the surety operates, in the absence of any contract to the contrary, as a revocation of a continuing guarantee, so far as regards future transactions."
🔍 Explanation:
A continuing guarantee is a guarantee that extends to a series of transactions.
If the surety (guarantor) dies, the guarantee is automatically revoked for all future transactions after the death.
However, this revocation does not affect past transactions already guaranteed.
This is applicable unless there is a specific agreement that the guarantee will continue even after the surety's death.
📌 Example:
A guarantees payment for goods supplied by B to C over a period.
After A dies, B supplies more goods to C.
A’s estate is not liable for goods supplied after his death, unless there was an agreement stating otherwise.
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