{"id":274947,"date":"2022-10-04T12:00:46","date_gmt":"2022-10-04T06:30:46","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=274947"},"modified":"2022-10-04T12:00:46","modified_gmt":"2022-10-04T06:30:46","slug":"contract-indemnity-guarantee-difference-explained-supreme-court-legal-research-updates-news","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2022\/10\/04\/contract-indemnity-guarantee-difference-explained-supreme-court-legal-research-updates-news\/","title":{"rendered":"Explained| Difference between Contract of Indemnity and Contract of Guarantee"},"content":{"rendered":"<p style=\"text-align: justify;\"><strong>Supreme Court<\/strong>: In an Insolvency and Bankruptcy case, the bench of <strong>Indira Banerjee*<\/strong> and JK Maheshwari, JJ has explained the difference between Contract of Indemnity and Contract of Guarantee and has explained that:<\/p>\n<p style=\"text-align: justify;\">the contract of indemnity is a contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself or by the conduct of any other person. In a contract of indemnity, a promisee acting within the scope of his authority is entitled to recover from the promisor all damages and all costs which he may incur.<\/p>\n<p style=\"text-align: justify;\">a contract of guarantee, on the other hand, is a promise whereby the promisor promises to discharge the liability of a third person in case of his default. The person who gives the guarantee is called the surety. The person in respect of whose default, the guarantee is given is the principal debtor and the person to whom the guarantee is given is the creditor. Anything done or any promise made for the benefit of the principal debtor may be a sufficient consideration to the surety for giving the guarantee. On the other hand, the bailment of goods as security for payment of a debt or performance of a promise is a pledge.<\/p>\n<p>The Court explained the distinction between the two forms of contracts in this case:<\/p>\n<p style=\"text-align: justify;\">\n<blockquote class=\"wp-embedded-content\" data-secret=\"Y5fDd0i5PJ\"><p><a href=\"https:\/\/www.scconline.com\/blog\/post\/2022\/10\/04\/ibc-cirp-can-be-initiated-against-two-corporate-debtors-same-amount-cannot-be-recovered-from-both-supreme-court-legal-research-news\/\">IBC| CIRP proceedings can be initiated against two Corporate Debtors but same amount cannot be realised from both: Supreme Court\u00a0<\/a><\/p><\/blockquote>\n<p><iframe loading=\"lazy\" class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;IBC| CIRP proceedings can be initiated against two Corporate Debtors but same amount cannot be realised from both: Supreme Court\u00a0&#8221; &#8212; SCC Blog\" src=\"https:\/\/www.scconline.com\/blog\/post\/2022\/10\/04\/ibc-cirp-can-be-initiated-against-two-corporate-debtors-same-amount-cannot-be-recovered-from-both-supreme-court-legal-research-news\/embed\/#?secret=HdXKe3YuL4#?secret=Y5fDd0i5PJ\" data-secret=\"Y5fDd0i5PJ\" width=\"600\" height=\"338\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe><\/p>\n<p style=\"text-align: justify;\">[Maitreya Doshi v. Anand Rathi Global Finance Limited, <a href=\"http:\/\/www.scconline.com\/DocumentLink\/aZV24IF9\"><b>2022 SCC OnLine SC 1276<\/b><\/a>, decided on 22.09.2022]<\/p>\n<hr \/>\n<h4 style=\"text-align: justify;\">*Judgment by: Justice Indira Banerjee<\/h4>\n<p style=\"text-align: justify;\">For Appellant: Senior Advocate KK Vishwanathan<\/p>\n<p style=\"text-align: justify;\">For Respondent: Advocate Prateek Sakseria<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court: In an Insolvency and Bankruptcy case, the bench of Indira Banerjee* and JK Maheshwari, JJ has explained the difference between <\/p>\n","protected":false},"author":121,"featured_media":274985,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,9],"tags":[9292,41772,44270,52160,44309],"class_list":["post-274947","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-supremecourt","tag-contract-act","tag-contract-law","tag-contract-of-guarantee","tag-contract-of-indemnity","tag-words-and-phrases"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.4 (Yoast SEO v26.4) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Explained| Difference between Contract of Indemnity and Contract of Guarantee | SCC Times<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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Lakhs in case of premature resignation from Vijaya Bank\u2019s service","author":"Sucheta","date":"June 4, 2025","format":false,"excerpt":"Vijaya Bank while issuing the appointment letter to the respondent, included a restrictive covenant carrying an indemnity clause, wherein the respondent had to pay the Bank if he leaves the service before completion of 3 years.","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Rs 2 Lakh indemnity clause restrictive covenant","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/06\/Rs-2-Lakh-indemnity-clause-restrictive-covenant.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/06\/Rs-2-Lakh-indemnity-clause-restrictive-covenant.webp?resize=350%2C200&ssl=1 1x, 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operational creditor.","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"National Company Law Tribunal","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/National-Company-Law-Tribunal.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/National-Company-Law-Tribunal.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/National-Company-Law-Tribunal.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/National-Company-Law-Tribunal.webp?resize=700%2C400&ssl=1 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The same has to\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/02\/sc-3-3.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/02\/sc-3-3.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/02\/sc-3-3.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/02\/sc-3-3.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/02\/sc-3-3.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":212365,"url":"https:\/\/www.scconline.com\/blog\/post\/2019\/03\/25\/making-competitive-exams-easier-with-the-mcq-series\/","url_meta":{"origin":274947,"position":3},"title":"Making competitive exams easier with the MCQ Series","author":"SM","date":"March 25, 2019","format":false,"excerpt":"MCQ on Contract Law I provides a clear and concise overview of the Law of Contract in India covering formation and basic elements of a contract, contingent contracts, quasi-contracts, breach of contract apart from a separate chapter on Specific Relief Act. 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