Section 139 - Discharge of surety by creditor's act or omission impairing surety's eventual remedy : Indian Contract Act 1872

What is Discharge of surety by creditor's act or omission impairing surety's eventual remedy? Section 139 of Indian Contract Act 1872

Section 139 of Indian Contract Act 1872 : "Discharge of surety by creditor's act or omission impairing surety's eventual remedy"

Discharge of surety by creditor139. If the creditor does any act which is inconsistent with the rights of the surety, or omits to do any act which his duty to the surety requires him to do, and the eventual remedy of the surety himself against the principal debtor is thereby impared, the surety is discharged.

Illustrations
(a) B contracts to build a ship for C for a given sum, to be paid by instalments as the work reaches certain stages. A becomes surety to C for B's due performance of the contract. C, without the knowledge of A, prepays to B the last two instalments. A is discharged by this prepayment.

(b) C lends money to B on the security of a joint and several promissory note made in C's favour by B, and by A as surety for B, together with a bill of sale of B's furniture, which gives power to C to sell the furniture, and apply the proceeds in discharge of the note. Subsequently, C sells the furniture, but, owing to his misconduct and wilful negligence, only a small price is realised. A is discharged from liability on the note.

(c) A puts M as apprentice to B, and gives a guarantee to B for M's fidelity. B promises on his part that he will, at least once a month, see that M make up the cash. B omits to see this done as promised, and M embezzles. A is not liable to B on his guarantee's act or omission impairing surety's eventual remedy.

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