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 |
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. |
The indemnifier need not necessarily act at the request of the indemnified. |
The surety give guarantee only at the request of the principal debtor |
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 |