A contract of counter guarantee is different from a contract of fidelity guarantee or performance 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. A guarantee, guaranteeing an employer against the misconduct of an employee or to answer for the debt or default of another, is called a "fidelity guarantee". A guarantee given by the principal debtor to the surety providing him continuing indemnity against any loss or damage that the surety may suffer on account of default on the part of the principal debtor is called "counter guarantee". A guarantee which ensures the contracted performance of another person and under which the surety undertakes to compensate the person in whose favour the guarantee is given, in the event of failure on the part of the person on whose behalf the guarantee is given, is known as "performance guarantee".