A becomes surety to C for B rsquo s conduct as a manager of C rsquo s bank Afterwards B and C contra...........

Indian Contract Act (ICA)1872 Discharge and Breach of Contract

A becomes surety to C for B’s conduct as a manager of C’s bank. Afterwards B and C contract without A’s permission that B shall become liable for one fourth of the losses on overdraft B allows a customer to overdraw and the bank loses a sum to money. To make good this loss A is:

Wholly Liable

Not Liable

Liable to the extent of the fourth

Liable to the extent of three fourth

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Explanation:

133. Discharge of surety by variance in

terms of contract.

Any variance made without the surety's consent, in the terms of the contract between the principal debtor and the creditor, discharges the surety as to transactions subsequent to the variance.

Illustrations-

(a) A becomes surety to C for B's conduct as manager in C's bank. Afterwards, B and C contract, without A' s consent, that B' s salary shall be raised, and that he shall become liable for one-fourth of the losses on overdrafts. B allows a customer to over-draw, and the bank loses a sum of money.

A is discharged from his suretyship by the variance made without his consent, and is not liable to make good this loss