Indian Contract Act,1872

Act No : 9

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Section : Discharge of surety by release or discharge of principal debtor

134.Discharge of surety by release or discharge of principaldebtor.-The surety is discharged by any contract between the creditorand the principal debtor, by which the principal debtor is released orby any act or omission of the creditor, the legal consequence of whichis the discharge of the principal debtor. Illustrations (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 andcontracts with his creditors (including C) to assign to them hisproperty in consideration of their releasing him from their demands.Here B is released from his debt by the contract with C, and A isdischarged from his suretyship. (b) A contracts with B to grow a crop of indigo an A's land andto deliver it to B at a fixed rate, and C guarantees A's performanceof this contract. B diverts a stream of water which is necessary forirrigation of A's land and thereby prevents him from raising theindigo. C is no longer liable on his guarantee. (c) A contracts with B for a fixed price to build a house for Bwithin a stipulated time, B supplying the necessary timber. Cguarantees A's performance of the contract. B omits to supply thetimber. C is discharged from his suretyship.

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