Question 2 OR (b)

Surety is a favoured debtor

5 marks

Time to write: About 10 minutes

From an older CBCS paper

Question

Question 2 OR (b) · 5 marks

Surety is a favoured Debtor. Discuss.

Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.

Before you write

Read off the question and its marks

10 minfor 5 marks

Read from the question

DiscussA statement to explain: say what it means first, then build the answer around it.

Write it in this order

Read; underline the asks; jot your points 1 min
1 Discussion 1 mark 2 min
2 Discharge by the creditor's conduct 2 marks 3 min
3 Subrogation and securities 2 marks 3 min
Check: every ask answered, key terms underlined 1 min

123

Short on time? Trim steps 2 and 3 evenly rather than skip one: each is capped at its own marks.

Try it first. About 10 minutes for 5 marks. Write it out, then open the solution.

Solution

Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.

Discussion. A surety undertakes another's liability for no benefit of his own; the law therefore protects him, discharging him whenever the creditor's conduct prejudices him and giving him rights on payment. In that sense he is a favoured debtor.

Discharge by the creditor's conduct:

Any variance in the terms of the contract between the principal debtor and the creditor, made without the surety's consent, discharges the surety as to transactions after the variance (s. 133).
The surety is discharged if the creditor releases the principal debtor by a new contract, or by any act or omission whose legal consequence is the principal debtor's discharge (s. 134). Discharge in other ways. The surety's own act also ends his liability: he may revoke a continuing guarantee as to future transactions by notice to the creditor (s. 130); and a novation, a new contract in place of the old, discharges him.

Rights of the surety: on payment he is invested with all the creditor's rights against the principal debtor (s. 140), and he is entitled to the benefit of every security the creditor had; if the creditor loses or parts with it without his consent, he is discharged to that extent (s. 141).

Where the 5 marks sit

#	Component	Marks
1	Discussion	1
2	Discharge by the creditor's conduct	2
3	Subrogation and securities	2
	Total	5

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