Module: | Guarantee, Indemnity, and Bailment
Q13: Consider the following statements:
Assertion (A): If a bank grants more time to the principal debtor to repay a loan, without the surety's permission, the surety is discharged from the guarantee.
Reason (R): Any variation made by the bank in the terms of the original loan contract, without the surety's consent, will discharge the surety.
Reason (R): Any variation made by the bank in the terms of the original loan contract, without the surety's consent, will discharge the surety.
✅ Correct Answer: A
Both statements are correct.
Section 133 of the Indian Contract Act states that any variance in the terms of the contract between the creditor (bank) and principal debtor, without the surety's consent, discharges the surety.
Granting extra time (Assertion A) is a form of variance (Reason R), thus R correctly explains A.
Section 133 of the Indian Contract Act states that any variance in the terms of the contract between the creditor (bank) and principal debtor, without the surety's consent, discharges the surety.
Granting extra time (Assertion A) is a form of variance (Reason R), thus R correctly explains A.