Distinguish Between Indemnity And Guarantee
Append below some salient points pertaining to the difference/distinction between Indemnity And Guarantee:
|
Indemnity |
Guarantee |
|
Comprise only two parties- the indemnifier and the indemnity holder. |
There are three parties namely the surety, principal debtor and the creditor |
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Liability of the indemnifier is primary |
The liability of the surety is secondary. The surety is liable only if the principal debtor makes a default. The primary liability being that of the principal debtor. |
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The indemnifier need not necessarily act at the request of the indemnified. |
The surety give guarantee only at the request of the principal debtor |
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The possibility of any loss happening is the only contingency against which the indemnifier undertakes to indemnify. |
There is an existing debt or duty, the performance of which is guarantee by the surety |
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