A surety is said to be discharged when his liability comes to an end. Define various modes of Discharge of surety according to provisions of the…

(a) According to the provisions of the Indian Contract Act,1872, a surety is said to be discharged when his liability as surety comes to an end. The various modes of discharge of surety are: (i) By revocation of the contract of guarantee. (ii) By the conduct of the creditor, or (iii) By the invalidation of the contract of guarantee. (i) By revocation of the Contract of Guarantee (a) Revocation of Continuing Guarantee by Notice (Section 130): The continuing guarantee may at any time be revoked by the surety as to future transactions by notice to the creditors. A specific guarantee can be revoked only if liability to principal debtor has not accrued. (b) Revocation of Continuing Guarantee by Surety’s Death (Section 131): In the absence of any contract to the contrary, the death of surety operates as a revocation of a continuing guarantee as to the future transactions taking place after the death of surety. However, the surety’s estate remains liable for the past transactions which have already taken place before the death of the surety. (c) By Novation [Section 62]: The surety under original contract is discharged if a fresh contract is entered into either between the same parties or between the other parties, the consideration being the mutual discharge of the old contract. (ii) By conduct of the creditor (a) By variance in terms of contract (Section 133): Where there is any variance in the terms of contract between the principal debtor and creditor without surety’s consent, it would discharge the surety in respect of all transactions taking place subsequent to such variance. (b) By release or discharge of principal debtor (Section 134): The surety is discharged if the creditor:enters into a fresh/ new contract with principal debtor; by which the principal debtor is released, ordoes any act or omission, the legal consequence of which is the discharge of the principal debtor. (c) Discharge of surety when creditor compounds with, gives time to, or agrees not to sue, principal debtor [Sector - 135]: A contract between the creditor and the principal debtor, by which the creditor makes a composition with, or promises to give time to, or promises not to sue, the principal debtor, discharges the surety, unless the surety assents to such contract. (d) Discharge of surety by creditor’s act or omission impairing surety’s eventual remedy [Section 139]: 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 impaired, the surety is discharged. (iii) By the invalidation of the contract of guarantee (a) Guarantee obtained by misrepresentation [Section 142]: Any guarantee which has been obtained by means of misrepresentation made by the creditor, or with his knowledge and assent, concerning a material part of the transaction, is invalid. (b) Guarantee obtained by concealment [Section 143]: Any guarantee which the creditor has obtained by means of keeping silence as to material circumstances is invalid. (c) Guarantee on contract that creditor shall not act on it until co-surety joins (Section 144): Where a person gives a guarantee upon a contract that the creditor shall not act upon it until another person has joined in it as co-surety, the guarantee is not valid if that other person does not join.