1. The undertaking to be given by the surety under contract of guarantee must be on the request of the principal debtor.
2. The primary liability is that of the principal debtor and the liability of the surety is secondary. It arises only when there is a default by the principal debtor.
3. For a valid contract of guarantee, it is essential that the creditors must reveal all the facts related to the principal debtor, which may effect the liability of surety, clearly.
4. The contract of guarantee may be oral or written, or both. The guarantee given in case of hank is usually a written contract.
5. If guarantee given by the surety is not at the request of the principal debtor, in such a case, the contract is not taken as a valid one.
