The correct answer is: A. A guarantee which continues even after the contract comes
to an end.A continuing guarantee is a guarantee that continues
even after the contract that it is related to comes to an end. This means that the guarantor is still liable for the debt even if the original debtor has paid it off or if the contract has been terminated.Continuing guarantees are often used in business transactions, where one company may guarantee the debts of another company. This can be done to protect the interests of creditors, who may be more likely to lend money to a company if they know that there is a guarantee in place.
Continuing guarantees can also be used in personal relationships, such as when a parent guarantees the debts of their child. This can be done to help the child get a loan or credit card, or to prevent the child from being sued if they cannot repay the debt.
It is important to note that continuing guarantees can be risky for the guarantor. If the debtor does not repay the debt, the guarantor may be held liable. This is why it is important to carefully consider the terms of any guarantee before agreeing to it.
Here is a brief explanation of each option:
- Option A: A guarantee which continues even after the contract comes to an end. This is the correct answer. A continuing guarantee is a guarantee that continues even after the contract that it is related to comes to an end. This means that the guarantor is still liable for the debt even if the original debtor has paid it off or if the contract has been terminated.
- Option B: A guarantee which shall be applicable to any other person who becomes a party to the contract. This is not the correct answer. A continuing guarantee is not necessarily applicable to any other person who becomes a party to the contract. It can be limited to the original debtor and the guarantor.
- Option C: A guarantee which extends to a series of transaction. This is not the correct answer. A continuing guarantee does not necessarily extend to a series of transactions. It can be limited to a single transaction.
- Option D: A guarantee which continues till the contract does not come to an end. This is not the correct answer. A continuing guarantee does not necessarily continue until the contract does not come to an end. It can end at any time, as long as the guarantor gives the debtor reasonable notice.