Sunita stood as surety under a continuing guarantee for a cash credit facility availed by a firm from a bank. She later revokes the guarantee by notice to the bank. Under s.130 of the Indian Contract Act 1872, she:

A continuing guarantee under s.129 of the Indian Contract Act extends to a series of transactions, so the surety's liability continues for every fresh advance. Section 130 provides that a continuing guarantee may at any time be revoked by the surety as to future transactions by notice to the creditor, and the provision applies equally where there are several co-sureties. The revocation operates prospectively: the surety remains liable for transactions already entered into before the notice reaches the creditor, because those obligations have been incurred on the faith of the guarantee. Consent of the principal debtor or of the bank is not required, and a continuing guarantee remains revocable by notice despite the duration agreed. Option (b) correctly captures this prospective discharge.