CA Foundation doubt
Cases were surety is not discharge
Cases were surety is not discharge 1) surety not discharge when agreement made with the third person to give time to principal debtor explain with example Discharge of surety by creditors act or omission impairing sure it is eventual remedy explain
Asked by Himesh··1 answer
BrunoAI answerAI first answer — verify with your teacher
Both are rules on discharge of surety under the Indian Contract Act, 1872. 1. Sec. 136: surety is NOT discharged The extension of time must be agreed between the creditor and the principal debtor (Sec. 135) to discharge the surety. A deal with an outsider does not change the surety's position. Example: A owes C Rs 1 lakh and S is surety. C agrees with M, a friend of A, to give A 3 more months. S is not discharged. 2. Sec. 139: surety IS discharged If the creditor does any act inconsistent with the surety's rights, or omits a duty owed to the surety, and this harms the surety's eventual remedy against the principal debtor, the surety is discharged. Example: B agrees to build a ship for C, with payment in instalments as work progresses. A is surety for B's performance. Without A's knowledge, C pays B the last two instalments in advance. A is discharged, because his security over the unpaid money is lost. Section numbers are as per the current ICAI study material. Do check the latest edition for your attempt.
It is a contract to perform the promise, or discharge the liability, of a third person in case of his default. The parties are the surety, the principal debtor and the creditor.
Yes, any variance in the terms of the contract between the principal debtor and creditor made without the surety's consent discharges the surety as to transactions after the variance.
Yes, a contract between the creditor and principal debtor by which the principal debtor is released, or any act or omission of the creditor that legally discharges the principal debtor, discharges the surety.
Ask and reply in the free Studycaller app. Students and Bruno answer fast.
CA FoundationIndian Contract Act 1872 - rights of surety
BrunoAI answer
1. Right of subrogation (Sec. 140, Indian Contract Act, 1872): once the surety pays the guaranteed debt or performs the promise, he steps into the creditor's shoes. He gets all the rights the creditor had against the principal debtor. 2. Implied promise to indemnify surety (Sec. 145): every contract of guarantee carries an implied promise by the principal debtor to repay the surety. He can recover any sum he rightfully paid, but not any sum he paid wrongfully. Example: A borrows Rs 1,00,000 from a bank and pledges gold. B is the surety. A defaults and B pays the bank. - Subrogation: B can now sue A and claim the pledged gold, just as the bank could. - Indemnity: B can recover the Rs 1,00,000 from A. But if B defended the bank's suit without reasonable cause, he cannot recover those costs from A.
Read full answer →
1 answer 13 Nov 2026
CA FoundationNature and Scope of Business Economics - economist names
Sonu
Mathematics
Read full answer →
2 answers 13 Nov 2026
CA FoundationBusiness Laws - important sections for revision
BrunoAI answer
Great revision plan! Search each Act in the Notes tab, and the related notes below (especially the section-wise lists) cover this well. Quick starter list: - Contract Act: Sec 2, 10, 11, 13-22 (consent), 25, 56, 73, 124-126 - Sale of Goods: Sec 4, 12, 14-17 (implied conditions, caveat emptor), 18-24 (transfer of property), 45-46 (unpaid seller) - Partnership: Sec 4, 6, 18-19, 39-44 (dissolution), 58, 69 - Companies Act: Sec 2(20), 2(62) OPC, 2(68), 2(71), 2(85), 2(87), 3-5, 8 Check the latest ICAI study material/RTP for your attempt.
Read full answer →
1 answer 13 Nov 2026
CA FoundationGroup MCQ practice for CA Foundation
BrunoAI answer
Great idea, practising MCQs with friends makes revision stick! - Head to the app's Rooms tab to join or create a room and study together with other students. - Pick an MCQ set (the Economics MCQ notes listed below work well), solve them together, then compare answers and explanations. - Keep it exam-style: time yourselves and count negative marking, just like the real objective papers.
Read full answer →
1 answer 13 Nov 2026
CA FoundationSale of Goods Act 1930 - implied conditions
Gaurii
Implied condition refers to the condition which is not needed to be expressly declared as it is already included in the law or anything
Read full answer →
5 answers 12 Nov 2026
CA FoundationIndian Contract Act 1872 - agent exceeding authority
BrunoAI answer
Section 228 applies here, not Section 233. Z will not succeed against X. 1. Section 227: if the authorised part can be separated from the excess, the principal is bound only for the authorised part. 2. Section 228: if they cannot be separated, the principal is not bound at all. 3. Here Y bought a single item for ₹12 lakhs against a ₹10 lakh limit. One item cannot be split into ₹10 lakh plus ₹2 lakh, so X is not liable. The discount or benefit to X does not change this. 4. Z can recover from Y, who exceeded his authority. Z could also claim from X if X ratifies the purchase. Section 233 applies only where the agent is personally liable. Then the third party may sue the agent, the principal, or both. That is not the issue here.
Read full answer →
1 answer 12 Nov 2026
Free app · 5 lakh+ learners
Read full notes, ask doubts, follow toppers and track your study hours — free on Android and iPhone.
