Indian Contract Act, 1872

Section - 134 - Discharge of surety by release or discharge of principal debtor

Discharge of surety by release or discharge of principal debtor

134. The surety is discharged by any contract between the creditor and the principal debtor, by which the principal debtor is released, or by any act or omission of the creditor, the legal consequence of which is the discharge of the principal debtor.

Illustrations

(a)-A gives a guarantee to C for goods to be supplied by C to B. C supplies goods to B, and afterwards B becomes embarrassed and contracts with his creditors (including C) to assign to them his property in consideration of their releasing him from their demands. Here B is released from his debt by the contracts with C, and A is discharged from his suretyship.
(b)-A contracts with B to grow a crop of indigo on A's land and to deliver to B at a fixed rate, and C guarantees A's performance of this contract. B diverts a stream of water which is necessary for the irrigation of A's land , and thereby prevents him from raising the indigo. C is no longer liable on his guarantee.
(c)-A contracts with B for a fixed price to bu .... To read the full section download the app from Google Play store