Explain the circumstances under which a guarantor may be discharged
Circumstances under which a guarantor would be discharged
- Payment of the amount due by the debtor or fulfillment of the obligation arising. If the creditors action against the debtor becomes statute bared.
- If the transaction between the credit and the principal debtor becomes illegal by reason of change of law or otherwise.
- Revocation of the guarantee by the guarantor.
- Death of the guarantor.
- Variation of the term of contract without the guarantors consent.
- If it is established that the guarantee was obtained by fraud, misrepresentation or concealment of material facts.
- Failure by the creditor to take steps that was necessary to protect his own interests.
- Discharge of co-guarantor discharges all.