Case Law Analysis
|Supreme Court of India
Section 126 Indian Contract Act | Corporate Guarantee as Independent Contract Enforceable Despite Bank Errors : SC
The Supreme Court ruled that a corporate guarantee constitutes a valid contract under Section 126 of the Indian Contract Act, binding banks to honor payment obligations even for erroneous remittances. The judgment reinforces that guarantees are independent undertakings, shielding beneficiaries from regulatory or procedural lapses by financial institutions.