Guarantees are specifically regulated by the National Civil Code. Whether a guarantor is liable depends on the guarantee, the underlying transaction and statutory rules governing surety obligations.[1]
A guarantee should clearly identify the principal obligation, maximum exposure where applicable, duration, triggering default and conditions for demand. Material misinformation or concealment in obtaining a guarantee can also have legal consequences under the Code.
Sources
- Nepal Law Commission, **National Civil Code, 2074**, Part 5, including ss. 504–541 and special contract chapters. View source