6. Now who will later pay to surety?
• Principal Debtor will pay later to surety
• Therefore is a consideration u/s 127- Benefits (creditor to PD)which
PD has is consideration for the Surety.
• If PD paid to Creditor, u/s 128 liability same as PD and not continue
after paid by PD. , therefore it is coextensive to PD
• Loan – to become surety, or who is wellwisher.
7. 129 -131
• 129 – Continuing Guarantee- series of transactions
• A asked B to give sugar to C.
• A-----B-------C
10kgs( C pays)
5kgs( C pays)
7kgs( C pays)
10kgs if C not able to pay then A will pay
8. Revocation of Continuing Guarantee
• 130
• By notice- from surety to
creditor
• 131
• Surety dies – CG ends over here
9. Invalid Guarantee
Invalid Guarantee
142 – if
misrepresentation
done for Guarantee
143- concealment of
fact
144-if co-surety
condition placed
unless that co surety
joins
10. Surety : when can be discharged/ can’t be
discharged?
• When he gets discharged from
liablity?
• 133 variance in terms of contract, PD
AND C changed terms of Contract,
therefore now Surety not liable
• 134 PD discharged now Surety not
liable.
• 135 C says that
• he is compounding or
• gives time to PD, or
• not going to sue P
• 139- C – act or omission –
inconsistent to the right of surety
• When he doesnot get discharged
from liablity?
• 136- if Creditor has contracted with
some 3rd person that he will not
sue PD
• 137 cant be discharged on mere
forbearance
• 138- many co- sureties doesnot
mean all the sureties are
discharged
• Rights of co-sureties: equal
contribution/s 146 or
• 147 Contribution according to
respective obligation.
11. Rights of Surety
• 140- PD fails to pay C , surety takes place of C for PD now. Surety steps
in the shoes of C for PD( Rule of Subrogation)
• 141- Rights of creditor will come to surety. Benefit of Creditor’s
security that PD gave to him will come now to surety.
• 145 Who will pay to surety?
PD will pay to surety, indemnity from PD.
