suretyship

The relationship among three parties whereby one person (the surety) guarantees payment of a debtor's debt owed to a creditor or acts as a co-debtor.

Generally speaking, "the relation which exists where one person has undertaken an obligation and another person is also under an obligation or other duty to the obligee, who is entitled to but one performance, and as between the two who are bound, one rather than the other should perform." Restatement of Security, No. 82 (1941).

See also surety; suretyship, contract of

@ suretyship, contract of

@ contract of suretyship

Contract whereby one party engages to be answerable for debt, default, or miscarriage of another and arises when one is liable to pay debt or discharge obligation, and party is entitled to indemnity from person who should have made the payment in the first instance before surety was so compelled. A contract whereby one person engages to be answerable for the debt, default, or miscarriage of another. An accessory promise by which a person binds himself for another already bound, and agrees with the creditor to satisfy the obligation, if the debtor does not. A lending of credit to aid a principal having insufficient credit of his own; the one expected to pay, having the primary obligation, being the "principal," and the one bound to pay, if the principal does not, being the "surety."

See also surety

@ suretyship defenses

Defenses of a surety against the creditor that are dependent on the surety's status as such and that are tied to the conduct of the creditor that alters or modifies the principal debtor's obligation or impairs collateral for the obligation

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