How is Discharge of surety by release or discharge of principal debtor? Section 134 of Indian Contract Act 1872
134. The surety is discharged by any contract between the creditor and the principal debtor, by which the principal debtor is released or by any act or omission of the creditor, the legal consequence of which is 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 and
contracts with his creditors (including C) to assign to them his
property in consideration of their releasing him from their
demands. Here B is released from his debt by the contract with
C, and A is discharged from his suretyship.
(b) A contracts with B to grow a crop of indigo on A's land and to deliver it to B at a fixed rate, and C guarantees A's performance of this contract. B diverts a stream of water which is necessary for irrigation of A's land and thereby prevents him from raising the indigo. C is no longer liable on his guarantee.
(c) A contracts with B for a fixed price to build a house for B within a stipulated time, B supplying the necessary timber. C guarantees A's performance of the contract. B omits to supply the timber. C is discharged from his suretyship.
Section 126 - Contract of guarantee surety principal debtor and creditor
Section 127 - Consideration for guarantee
Section 128 - Suretys liability
Section 129 - Continuing guarantee
Section 130 - Revocation of continuing guarantee
Section 131 - Revocation of continuing guarantee by suretys death
Section 133 - Discharge of surety by variance in terms of contract
Section 134 - Discharge of surety by release or discharge of principal debtor
Section 137 - Creditors forbearance to sue does not discharge surety
Section 138 - Release of one co-surety does not discharge others
Section 139 - Discharge of surety by creditor's act or omission impairing surety's eventual remedy
Section 140 - Rights of surety on payment of performance
Section 141 - Suretys right to benefit of creditors securities
Section 142 - Guarantee obtained by misrepresentation invalid
Section 143 - Guarantee obtained by concealment invalid
Section 144 - Guarantee on contract that creditor shall not act on it until co-surety joins