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W
hen its about securing ones interest while entering into the
contract, people mostly go for a contract of indemnity or
guarantee. At first instance, these two will appear same, but there
are some differences between them. Indemnity is when one
party promises to compensate the loss occurred to the other party,
due to the act of the promisor or any other party.
The guarantee is when a person assures the other party that he
will fulfill the obligation in case of default by the third party.
So if you are also interested to know about the differences
between guarantee and indemnity then lets take a further read.
Content: Indemnity Vs Guarantee
1. Comparison Chart
2. Definition
3. Key Differences
4. Conclusion
Comparison Chart
BASIS FOR
COMPARISON
INDEMNITY
Meaning
Defined in
Parties
Number of Contracts
One
Degree of liability of
the promisor
Primary
Purpose
Maturity of Liability
Definition of Indemnity
After having a deep discussion on the two, now we can say that
these two types of contract are different in many respects. In
indemnity, the promisor cannot sue the third party, but in the
case of guarantee, the promisor can do so because after
discharging the creditors debts he gets the position of the
creditor.
BASIS FOR
INDEMNITY
COMPARISON
Meaning
Parties
Number of Contracts
One
Degree of liability of
Primary
the promisor
Purpose
Maturity of Liability