Mr. X in consideration, that Mr. Y will employ Mr. Z in collecting the rent of Zamindari, promises to Mr. B to be responsible to the amount of ₹10,000 for the due collection and payment by Mr. Z of these rents. Decide, w

The problem is related to the contract of guarantee. A contract of guarantee is a contract to perform the promise, or discharge the liability of a third person in case of his default. The person who gives the guarantee is called the Surety, the person for whom the guarantee is given is called the Principal Debtor, and the person to whom the guarantee is given is called the Creditor. A guarantee may be either oral or written, although in the English law, it must be in writing. Section 129 of the Indian Contract Act, 1872 lays down the meaning of continuing guarantee. A continuing guarantee is one which extends to a series of transactions. The liability of surety in case of a continuing guarantee extends to all the transactions contemplated until the revocation of the guarantee. Therefore the instant problem is related to continuing guarantee . Revocation of a Continuing Guarantee: A Continuing guarantee is revoked in the following cases:- By notice of revocation by the surety (Section 130): The notice operates to revoke the surety's liability as regards future transactions. He continues to be liable for transactions entered into prior to the notice. By the death of the surety: The death of the surety operates, in the absence of contract as a revocation of a continuing guarantee, so far as regards future transactions (Section 131). But for all the transactions made before his death, the surety's estate will be liable.