Explain two instances when the guarantor will not be held liable on the principal debt
The instances when the guarantor will not be held liable on the principal debt
- By death: whenever a guarantor comes .across death, his liability comes to an end. But sureties’ legal representatives will be held liable. Legal representative is liable to the debts granted by creditors to principal debtor till data of filing death notice by legal representative.
- By renewal; whenever renewal of guarantee contract takes place, old guarantee comes to an end. For example; there is a contract of guarantee among X, Y and Z who are creditor, principal debtor and surety respectively. Thereafter Y has arranged Mr. A as surety in place of Z. As a consequence Z’s guarantee gets f revoked and Z’s liability goes off.