Suretyship Issue 3

The Liability of the Surety

The consequence of a contract of surety is, naturally, that the surety is liable to the creditor for payment of his or her debt by the principal debtor, or for a lesser amount if the surety has only bound himself or herself in respect of such lesser amount. 

As a result of the accessory nature of the liability of the surety, he or she may rely on defects in the liability of the principal debtor, for example duress and misrepresentation.

But the surety may not rely on mere personal defences such as minority, which may be at the disposal of the principal debtor.

Because the surety’s obligation is accessory to the principal debt, it becomes enforceable only if the principal debtor defaults in the performance of the principal obligation.

If the principal debtor is granted an extension of time, the surety may not be held liable in the meantime.

If the debt is for an unliquidated or uncertain amount, the surety is not liable until the amount of the debt has been established or otherwise.

Biblical Perspective

Proverbs 17:18

“A man void of understanding striketh hands, and becometh surety in the presence of his friend.”

The meaning hereof is that a person who quickly concludes a contract and becomes surety in the presence of a friend, proves he is void of understanding.