Question

In which of the following cases, a surety may be discharged from liability?

• A. By notice of revocation in case of a continuing guarantee as regards to past transaction
• B. By the death of the surety as regards to past transactions, in a continuing guarantee
• C. Any variation in the terms of the contract between the creditor and the principal debtor, with the consent of the surety
• D. If the creditor releases the principal debtor, or acts or makes an omission which results in the discharge of the principal debtor

Answer 1

The correct option is D If the creditor releases the principal debtor, or acts or makes an omission which results in the discharge of the principal debtor

Section 139 of the Indian Contract Law states "Discharge of surety by creditor’s act or omission impairing surety’s eventual remedy.—If the creditor does any act which is inconsistent with the rights of the surety, or omits to do any act which his duty to the surety requires him to do, and the eventual remedy of the surety himself against the principal debtor is thereby impaired, the surety is discharged."