Akhil appointed Nikhil as a salesman to sell goods at yearly salary for which Abhishek became guarantor for Nikhil's duly accounting for money received by him as salesman. Later on, without Abhishek's knowledge or consen

CS Executive · Economic and Commercial Laws · PYQS · December 2021
Akhil appointed Nikhil as a salesman to sell goods at yearly salary for which Abhishek became guarantor for Nikhil's duly accounting for money received by him as salesman. Later on, without Abhishek's knowledge or consent Akhil and Nikhil agreed that Nikhil should be paid by a commission of the goods sold by him and not by a fixed annual salary. Decide whether Abhishek is liable for subsequent misconduct of Nikhil ?

Answer & Explanation:

Section 133 of the Indian Contract Act, 1872 provides that when the surety has undertaken liability on certain terms. It is expected that that they will remain unchanged during the whole period of guarantee. If there is any variance in the terms of the contract between the principal debtor and the creditor, without the consent of the surety, the surety gets discharged as regards transactions subsequent to such a change. The reason for such a discharge is that the surety agreed to be liable for a contract which is no more there, and he is not liable on the altered contract because it is different from the contract made by him, Section 133, which makes a provision in this regard, is as follows: "Any variance, made without the surety's consent in the terms of the contract between the principal debtor and the creditor discharges the surety as to transactions subsequent to the variance" The present case asked in the question is also based upon the aforesaid provisions of the Indian Contract Act, 1872. Here there is variance in the original contract between Akhil and Nikhil for which Abhishek is does not know and further no information was given to him for such variance. Therefore, Abhishek is not liable for subsequent misconduct of Nikhil.

Topics: Indian Contract Act, 1872

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