91.
Identify the wrong statement from the following
A:
An indemnity is for reimbursement of a loss, while a guarantee is for security of the creditor.
B:
In a contract of indemnity the liability of the indemnifier is secondary and arises when the contingent event occurs. In case of contract of guarantee the liability of surety is primary ans arises when the principal debtor defaults.
C:
The indemnifier after performing his part of the promise has no rights against the third party and he can sue the third party only if there is an assignment in his favor. Whereas in a contract of guarantee, the surety steps into the shoes of the creditor on discharge of his liability, and may sue the principal debtor.
D:
In a contract of indemnity the liability of the indemnifier is primary and arises when the contingent event occurs. In case of contract of guarantee the liability of surety is secondary and rises when the principal debtor defaults.
The answer is:
B
