Indian Contract Act,1872
Act No : 9
Section : Discharge of surety by variance in terms of contract
133.Discharge of surety by variance in terms of contract.-Anyvariance, made without the surety's consent, in the terms of thecontract between the principal 1[debtor] and the creditor, dischargesthe surety as to transactions subsequent to the variance. Illustrations (a) A becomes surety to C for B's conduct as a manager in C'sbank. Afterwards B and C contract, without A's consent, that B'ssalary shall be raised, and that he shall become liable for one-fourthof the losses on overdrafts. B allows a customer to overdraw, and thebank loses a sum of money. A is--------------------------------------------------------------------- 1 Ins. by Act 24 of 1917, s. 2 and Sch. I.---------------------------------------------------------------------52discharged from his suretyship by the variance made without hisconsent, and is not liable to make good this loss. (b) A guarantees C against the misconduct of B in an office towhich B is appointed by C, and of which the duties are defined by anAct of the Legislature. By a subsequent Act, the nature of the officeis materially altered. Afterwards, B misconducts himself. A isdischarged by the change from future liability under his guarantee,though the misconduct of B is in respect ,of a duty not affected bythe later Act. (c) C agrees to appoint B as his clerk to sell goods at a yearlysalary, upon A's becoming surety to C for B's duly accounting formoneys received by him as such clerk. Afterwards, without A'sknowledge or consent, C and B agree that B should be paid by acommission on the goods sold by him and not by a fixed salary. A isnot liable for subsequent misconduct of B. (d) A gives to C a continuing guarantee to the extent of 3,000rupees for any oil supplied by C to B on credit. Afterwards B becomesembarrassed, and, without the knowledge of A, B and C contract that Cshall continue to supply B with oil for ready money, and that thepayments shall be applied to the then existing debts between B and C.A is not liable on his guarantee for any goods supplied after :thisnew arrangement. (e) C contracts to lend B 5,000 rupees on the 1st March. Aguarantees repayment. C pays the 5,000 rupees to B on the 1stJanuary. A is discharged from his liability, as the contract has beenvaried, inasmuch as C might sue B for the money before the 1st ofMarch.
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