Surety is entitled to receive the securities in exactly the same condition as they formerly stood, otherwise he will be discharged. Surety is discharged to the extent of the value of the security lost or parted by the creditor without his consent.

The expression ‘security’ in section 141 is not used in any technical sense it includes all rights which the creditor had against the property at the date of the contract. The surety is on payment of the amount due by the principal debtor to be put in the same position in which the creditor stood in relation to the principal debtor. If the creditor has lost or has parted with that security without the consent of the surety, the latter is by the express provision contained in section 141, discharged to the extent of the value of the security lost or parted with.

By misrepresentation: (Sec 142)
Where a creditor mis-represents to the surety regarding the materials facts, the guarantee is invalid and therefore the surety is discharged.

By concealment: (Sec 143) When a creditor obtains a guarantee by concealing or keeping silent over the material facts, the surety is discharged as the guarantee is invalid.

Failure of co-surety to join: (Sec 144) Failure on the part of some person to join the surety who gave the guarantee on the express understanding that a creditor shall not act upon it until such another person has joined in it as co-surety, invalidates the guarantee and therefore discharges the surety.

When Surety is not discharged? Exceptions (Secs 136-138)

In the following cases, the surety is not discharged:

When agreement is made by creditor with third person to give time to principal debtor: (Sec136) Where a contract to give time to the principal debtor is made by the creditor with a third person and not the principal debtor, surety is not discharged.


C, the holder of an overdue bill of exchange drawn by A as surety for B and accepted by B. contracts with M to give time to B. A is not discharged.

Creditor’s forbearance to sue the principal debtor: (Sec 137). Mere forbearance on the part of the creditor to sue the principal debtor or to enforce any other remedy against him does not, in the absence of any provision to the contrary in the guarantee discharged the surety.

B owes C a debt guaranteed by A. the debt becomes payable. C does sue B for a year the debt has become payable. A is not discharged from the surety ship.

It is only a positive agreement or promise not to sue which would discharge the surety (Sec 135). Mere delay, neglect or forbearance to sue will not discharge the surety. A suit may be maintained against the surety, though the principal debtor has not been sued.

Release of one co-surety: (Sec 138) Where there are co-sureties, a release by the creditor of one of them does not discharge the others; neither does it free the surety so released from his responsibility to the other sureties.

At times, two or more persons guarantee a certain debt or cat of a debtor. They are called joint or co-sureties. In such cases, release of one of them by the creditor does not discharge the others. The released surety continues to be liable to other sureties. Their liability though joint and several is not distinct.

Invalid Guarantees:

Under the following circumstances, the contract of guarantee shall be invalid:

Guarantee obtained by misrepresentation: (Sec142) Any guarantee which has been obtained by means of misrepresentation made by the creditor, or with his knowledge and assent, concerning a material part of the transaction, is invalid, If there is active misrepresentation of the matter by the creditor, the surety will be discharged. A surety ought to be acquainted with the whole contract entered into with his principal. He should be informed of all the facts affecting his responsibility.

Guarantee obtained by concealment: (Sec 142) Any guarantee which the creditor has obtained by means of keeping silence as to material circumstances is invalid.

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