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Monday, January 27, 2014

Difference Guarantee Vs. Indemnity

Difference Guarantee   Vs. Indemnity







Guarantee   
Indemnity

1
In case of guarantee, there are three parties i.e. the Creditor (party), the Principal Debtor (in his favour guarantee issued) and Surety (bank).
In case of indemnity, there are two parties i.e.
Indemnifier (Promisor) and Indemnified (Promisee).

2
The liability of surety is secondary.
The liability of indemnifier is primary.
3
In case of guarantee, there is always existing debt.
The liability of the indemnifier arises only on the
happening of the event.
4
The guarantor undertakes obligation at the request of the Principal Debtor.
Indemnity is given without any request, expressed or
implied.
5
Guarantor can sue the Principal Debtor in case of Revocation.
Indemnifier cannot sue third parties unless there is the assignment.


Source: http://buildupyourbankingknowledge.blogspot.com
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