Comment on the following: A contract of guarantee is a contract to perform the promise.

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 in respect of whose default the guarantee is given is called the 'principle debtor'; and the person to whom the guarantee is given is called the 'creditor'. (section 126 of Indian Contract Act). There are therefore three parties to such a contract – the creditor, the principal debtor and the surety. The guarantee contract is an undertaking to make good the creditors in case the principle debtor does not fulfil his promise. Hence the creditor is assured that the promise will be performed by the guarantor in case the principle debtor fails.