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Section 133 - Discharge of surety by variance in terms of contract : Indian Contract Act 1872

 

What is the meaning of Discharge of surety by variance in terms of contract? Section 133 of Indian Contract Act 1872

Section 133 of Indian Contract Act 1872 : "Discharge of surety by variance in terms of contract"

133. Any variance, made without the surety's consent, in the terms of the contract between the principal (debtor) and the creditor, discharges the surety as to transactions subsequent to the variance.

Illustrations
(a) A becomes surety to C for B's conduct as a manager in C's bank. Afterwards, B and C contract, without A's consent, that B's salary shall be raised, and that he shall become liable for one-fourth of the losses on overdrafts. B allows a customer to overdraw, and the bank loses a sum of money. A is discharged from his suretyship by the variance made without his consent and is not liable to make good this loss.

(b) A guarantees C against the misconduct of B in an office to which B is appointed by C, and of which the duties are defined by an Act of the Legislature. By a subsequent Act, the nature of the office is materially altered. Afterwards, B misconducts himself. A is discharged by the change from future liability under his guarantee, though the misconduct of B is in respect of a duty not affected by the later Act.

(c) C agrees to appoint B as his clerk to sell goods at a yearly salary, upon A's becoming surety to C for B's duly accounting for moneys received by him as such clerk. Afterwards, without A's knowledge or consent, C and B agree that B should be paid by a commission on the goods sold by him and not by a fixed salary. A is not liable for subsequent misconduct of B.

(d) A gives to C a continuing guarantee to the extent of 3,000 rupees for any oil supplied by C to B on credit. Afterwards B becomes embarrassed, and, without the knowledge of A, B and C contract that C shall continue to supply B with oil for ready money, and that the payments shall be applied to the then existing debts between B and C. A is not liable on his guarantee for any goods supplied after this new arrangement.

(e) C contracts to lend B 5,000 rupees on the 1st March. A guarantees repayment. C pays the 5,000 rupees to B on the 1st January. A is discharged from his liability, as the contract has been varied, inasmuch as C might sue B for the money before the 1st of March.

 

INDIAN CONTRACT ACT 1872

Section 126 - Contract of guarantee surety principal debtor and creditor

Section 127 - Consideration for guarantee

Section 128 - Suretys liability

Section 129 - Continuing guarantee

Section 130 - Revocation of continuing guarantee

 

 

Section 131 - Revocation of continuing guarantee by suretys death

Section 132 - Liability of two persons, primarily liable, not affected by arrangement between them that one shall be surety on other's default

Section 133 - Discharge of surety by variance in terms of contract

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

Section 135 - Discharge of surety when creditor compounds with, gives time to, or agrees not to sue, principal debtor

 

 

Section 136 - Surety not discharged when agreement made with third person to give time to principal debtor

Section 137 - Creditors forbearance to sue does not discharge surety

Section 138 - Release of one co-surety does not discharge others

Section 139 - Discharge of surety by creditor's act or omission impairing surety's eventual remedy

Section 140 - Rights of surety on payment of performance

 

 

Section 141 - Suretys right to benefit of creditors securities

Section 142 - Guarantee obtained by misrepresentation invalid

Section 143 - Guarantee obtained by concealment invalid

Section 144 - Guarantee on contract that creditor shall not act on it until co-surety joins

Section 145 - Implied promise to indemnify surety

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