Indian Contract Act, 1872 · Chapter VI: Of the Consequences of Breach of Contract · Of indemnity and guarantee
Section 132: Liability of two persons, primarily liable, not affected by arrangement between them that one shall be surety on others default
In plain words
Where two persons together take on a liability to a third person, and separately agree between themselves that one is liable only if the other defaults, their liability to the third person is unaffected, even if the third person knew of that side arrangement.
A simplified explanation, prepared with AI assistance from the official text below and checked automatically against it for numbers and cross-references. The official text is the law and prevails over this summary. Not legal advice.
Official text
Where two persons contract with a third person to undertake a certain liability, and also contract with each other that one of them shall be liable only on the default of the other, the third person not being a party to such contract, the liability of each of such two persons to the third person under the first contract is not affected by the existence of the second contract, although such third person may have been aware of its existence.
Illustration
A and B make a joint and several promissory note to C. A makes it, in fact, as surety for B, and C knows this at the time when the note is made. The fact that A, to the knowledge of C, made the note as surety for B, is no answer to a suit by C against A upon the note.
Source: India Code (indiacode.gov.in), the consolidated text published by the Legislative Department, Government of India. Text as updated on India Code on 15 October 2026. Words in square brackets [ ] were inserted or substituted by later amending Acts, and *** marks words omitted by an amendment. The amendment footnotes are not reproduced here. Official text on India Code.