Section 143 – THE INDIAN CONTRACT ACT, 1872

Guarantee obtained by concealment invalid

Any guarantee which the creditor has obtained by means of keeping silence as to material circumstances, is invalid.
Illustrations
(a) A engages B as clerk to collect money for him. B fails to account for some of his receipts, and A in consequence calls
upon him to furnish security for his duly accounting. C gives his guarantee for B‟s duly accounting. A does not acquaint C with
B‟s previous conduct. B afterwards makes default. The guarantee is invalid.

1. See s. 44, supra.
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(b) A guarantees to C payment for iron to be supplied by him to B to the amount of 2,000 tons. B and C have privately
agreed that B should pay five rupees per ton beyond the market price, such excess to be applied in liquidation of an old debt. This
agreement is concealed from A. A is not liable as a surety.

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Company Registration Services in major cities of India

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