The Surety’s Liability’s nature and extent by Palak Agarwal

The Surety’s Liability’s nature and extent

Co-extensive Liability
Surety’s liability’s extent and nature is mentioned in Section 128. It is self-revealing that the
basic concept concerning a surety’s liability and principal debtor’s liability is co-extensive.
The word “co-extensive” denotes that the entire amount for which the debtor is liable the
surety is responsible for the same, and no more, depending on the amount of the principal
debt. It demonstrates that unless the contract of guarantee expressly states otherwise, the full
duration of the surety’s liability would be neither more nor less.
In situations where loan bonds are insured, the principal amount, and interest or other
payments that might become due on the bond will come under liability of surety. In Bank of
India v. Surendra Kumar Mishra, if principal debtor’s liability towards creditor is adjusted
or impacted it will also affect the surety.

•Limitation of Surety’s Liability
There are times when liability of surety is limited only to a portion of the contract. The terms
of the contract of guarantee limits the surety’s liability.
The surety may specifically restrict his guarantee to a particular sum or percentage of the
debt. In these situations, the surety’s responsibility is limited to the value of the bond
regardless of the amount owed by the principal debtor, the prescribed amount must be paid

Condition Precedent to Surety’s Liability
A contract of guarantee can have some condition precedents that must be satisfied before the
surety’s liability begins. The principle is partly recognized in Section 144. The section
provides that:
“Where a person gives a guarantee upon a contract that the creditor shall not act upon it until
another person has joined in it as co-surety, the guarantee is not valid if that other person does
not join”1
The contract of guarantee may include other provisions about the surety’s liability , which
must be met before the liability begins, the Supreme Court pointed out in Bank of Bihar Ltd
v. Dr Damodar Prasad, where certain conditions are not stipulated in the contract, the court
cannot impose them on its own.
The creditor is free to proceed against the surety at any time if a contract does not expressly
state that the creditor must exhaust his options against the debtor before proceeding against
the surety. In the event that the court demands the creditor conceding his right against the
guarantee, the whole reason for the contract is destined to fail.

Leave a Reply

Articles

Healing Hemp CBD Gummies (Updated Reviews) Reviews and Ingredients

Healing Hemp CBD Gummies work to work on your wellbeing and health by saddling the private or business helpful properties of CBD Gummies. The recipe is likewise regular, so the method of activity is regular and there is no gamble to your wellbeing and prosperity because of any unfriendly impacts. A characteristic equation reestablishes wellbeing by […]

Read More
Articles

Healing Hemp CBD Gummies (Pros and Cons) Is It Scam Or Trusted?

What are Healing Hemp CBD Gummies? Healing Hemp CBD Gummies are a reasonable extraordinary and hearty course of activity. They incorporate present day and standard adornments to address or fix logical issues. You need to kill the cannabinoids from the plant with exorbitant mindfulness. It very well might be joined with first rate trimmings to […]

Read More
Articles

#1 Shark-Tank-Official Healing Hemp CBD Gummies – FDA-Approved

Healing Hemp CBD Gummies work to improve your health and wellness by harnessing the residential or commercial restorative properties of CBD oil. The formula is also natural, so the mode of action is natural and there is no risk to your health and well-being as a result of any adverse effects. It is a natural […]

Read More