Q.No.1: CASE: On 1.1.2020, A guaranteed B to the extent of Rs. 50,000/- that C shall pay all credit purchases within 15 day of each credit purchase from B. After this agreement following events took place:

a) on 10.1.20 C purchased goods worth Rs. 30,000/-. C defaulted to pay on 25.1.20.

b) On 20.2.20, C again purchased on credit goods worth Rs. 20,000/- defaulted to pay.

c) On 26.2.20 A sent notice to B to withdraw his guarantee. Answer the following questions:

i) What type of guarantee was given by A ? ( 5 Marks )

ii) Was A liable to pay the guaranteed amounts of Rs. 30,000/- and Rs. 20,000/- ? Reasons for answer?

iii) Could A withdraw his guarantee on 26/2/20? Reason?

iv) Was C liable to indemnify A for payments made by him? Reason?

v) Under what circumstance a guarantor may be released from liability?