Contracts Act · s 82

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82.
“Continuing guarantee”
A guarantee which extends to a series of transactions is called a
“continuing guarantee”.
Illustrations
(a)
A, in consideration that B will employ C in collecting the rents of B’s estate, promises B to be responsible to the amount of $5,000 for the due collection and payment by
C of those rents. This is a continuing guarantee.
(b)
A guarantees payment to B, a tea dealer, to the amount of $1,000 for any tea he may from time to time supply to C. B supplies C with tea to above the value of $1,000 and C pays B for it. Afterwards, B supplies with tea to the value of $2,000. C fails to pay. The guarantee given by A was a continuing guarantee and he is accordingly liable to B to the extent of $1,000.

Contracts 56
(c)
A guarantees payment to B of the price of five sacks of flour to be delivered by B to
C and to be paid for in a month. B delivers five sacks to C. C pays for them. Afterwards B delivers four sacks to C, which C does not pay for. The guarantee given by A was not a continuing guarantee, and accordingly he is not liable for the price of the four sacks.

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s 82“Continuing guarantee”

A guarantee which extends to a series of transactions is called a

“continuing guarantee”.

Illustrations

(a)

A, in consideration that B will employ C in collecting the rents of B’s estate, promises B to be responsible to the amount of $5,000 for the due collection and payment by

C of those rents. This is a continuing guarantee.

(b)

A guarantees payment to B, a tea dealer, to the amount of $1,000 for any tea he may from time to time supply to C. B supplies C with tea to above the value of $1,000 and C pays B for it. Afterwards, B supplies with tea to the value of $2,000. C fails to pay. The guarantee given by A was a continuing guarantee and he is accordingly liable to B to the extent of $1,000.

Contracts 56

(c)

A guarantees payment to B of the price of five sacks of flour to be delivered by B to

C and to be paid for in a month. B delivers five sacks to C. C pays for them. Afterwards B delivers four sacks to C, which C does not pay for. The guarantee given by A was not a continuing guarantee, and accordingly he is not liable for the price of the four sacks.