We have come across two legal terms viz: Contract of Indemnity and Contract of Guarantee. They are not the same and there are differences between the two. Here are the differences between the two.
| S.No | Contract of Indemnity | Contract of Guarantee |
| 1. | One person promises here to save the other from any loss | Here, one person gives guarantee for the performance of contract |
| 2. | Here there are two parties | Here there are three parties |
| 3. | Here is only one Contract | Here there must be at least three contracts |
| 4. | Here the basic liability falls on indemnifies | Here surety has the secondary liability |
| 5. | Indemnifies has the interest in earning commission and premium | He has no any other interest except Guarantee. |
| 6. | The indemnifies cannot sue the third party | Guarantor is entitled to proceed against the principal debtor in his own name if he has paid the debt |
| 7. | The performance depends upon possibility of risk or loss | Here the there is an existing debt or duty performance about which guarantee is given. |
