CONTRACT OF GUARANTEE - LAW OF LIMITATION

A guarantor's liability depends upon the terms of his contract.There is a difference between a guarantee which stipulates that the guarantor is liable to buy only on a demand by the creditor and a guarantee which does not contain such a condition. In a case where the guarantee is payable on demand ,the limitation begins to run when the demand is made and the guarantor commits breach by not complying with the demand. Syndicate Bank Vs. Channaveerappa Beleri & Ors [JT 2006 (4) SC 579 ]