Section 134 - Discharge of surety by release or discharge of
principal debtor : Indian Contract Act
How is Discharge of surety by release or discharge of principal
debtor? Section 134 of Indian Contract Act
Section 134 of Indian Contract Act 1872 : "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.
(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 contract 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 it 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 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 build a house for
B within a stipulated time, B supplying the necessary timber. C
guarantees A's performance of the contract. B omits to supply
the timber. C is discharged from his suretyship.