The Topic Of Discharge Of Surety

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Ananya Mishra
214026
First Year

On the Topic-Discharge of Surety (Contracts -1)

In the Winter Semester

2014-15 INTRODUCTION:

Guarantee is a tripartite contract between three parties, creditor, principal debtor and surety.
The main function of a contract of guarantee is to enable a creditor to be secure enough and have another alternative to get his loan to be repaid. And to other to get a loan or goods on credit. Some person comes and tells the lender that he insures the repayment of the debt on the behalf of principal debtor.
For guarantee, there must be a conditional promise to be liable on the default of the principal debtor. The essentials for a contract of guarantee to be are existence of principal debt. As said in Lakeman v. Mountstephen, for guarantee, there has to be a debt first of all. Also there must be an intention on the part of the guarantor to assume the liability of the debt’s repayment not on his but on the debtor’s behalf.
Discharge of surety:
A contract of guarantee is said to be a contract strictissimi juris and the surety is entitled to insist on rigid adherence to the terms of his obligation and he is liable only for losses arising in the ordinary and usual course of things from a breach of the strict terms of the contract guaranteed. Surety has a
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