Qno 1. An Ajmal Hussain Corporation works as goods manufacturing company for Iqra Corporation. During the course of business Iqra Corporation become indebted for Rs. 4 Million. To recover the amount, Ajmal Corporation set a lien on the goods manufactured. A contractual agreement was made in which Alina corporation guaranteed the payment of Rs. 250,000 per Month as an installment of debt in return to release the goods manufactured.

Alina corporation guaranteed that incase of nonperformance of contractual agreement by the Iqra corporation, obligation will be due on the guarantor but not more than the amount due at the time of contract.

The Iqra Corporation could not abide the terms of the contracts and the contract was terminated. Iqra Corporation filed liquidation.

Alina corporation refused to pay the amount due appealing the view that contract was terminated before nonperformance and therefore they are not liable for damages

Required:Suggest the possible application according to the law of indemnity.

note: the laws of Pakistan