DISCHARGE OF SURETY

ROUGH DRAFT SUBMITTED IN PARTIAL COMPLETION OF THE COURSE

TITLED-

CONTRACT- II

SUBMITED TO: SUBMITTED BYAYUSH RAJ

Dr. VIJAY KUMAR VIMAL ROLL NUMBER- 2014
COURSE- B.B.A. LL. B(Hons.)
SEMESTER- 3rd

CHANAKYA NATIONAL LAW UNIVERSITY

MEETHAPUR, NYAYA NAGAR, PATNA 800001

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INTRODUCTION:
The project is on the topic “Discharge of surety” dealt under the Indian Contract Act 1872.
Surety is the second party of the contract of guarantee mentioned in section 126 of the same
act. The project shall include a detailed study of this section. According to section 126 “A
“Contract of Guarantee” is a contract to perform the promise or discharge the liability, of a
third person in case of his default.” The very object of the contract of guarantee is to provide
an additional security to the creditor in form of a promise by the surety to fulfil a certain
obligation, in case the principal debtor fails to do that. A surety is a person who comes forward
to pay the amount in the event of the borrower failing to pay the amount. The liability of a
surety is coextensive with the principal debtor. So, if in case a decree goes against the principal
debtor its wings may extend against the Surety also. Indian Contract Act contains certain
provisions which talks about the discharge of surety. There are seven situations under which
surety can be discharged from his liability.

 Revocation by Surety, dealt under section 130

 By surety’s death, section 131
 By variance in terms of contract, section 133
 By release or discharge of principal debtor, section 134
 When creditor compounds with, gives time to, or agrees not to sue the principal debtor,
section 135
 By creditor’s act or omission impairing surety’s eventual remedy, section 139
 By loss of security by creditor, section 141

The research shall include various decided cases involving the aforesaid sections. Along with
that various aspects of the contract of guarantee and surety’s rights & liabilities will be
discussed.

RESEARCH METHODOLOGY:

 The researcher has relied upon the doctrinal sources to carry out the research.

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RESEARCH OBJECTIVE:

 The object behind the research is to have a detailed study on the sections relating to the
contract of guarantee and discharge of surety’s liability in order to understand its
applicability.

TENTATIVE CHAPTERISATION:

1. CONTRACT OF GUARANTEE
2. LIABILITY OF SURETY
3. DISCHARGE OF SURETY
4. CONCLUSION
5. BIBLIOGRAPHY

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