Section 175 The Indian Contract Act, 1872
Section 175 of the Indian Contract Act, 1872 deals with the rights of a surety when the creditor discharges the principal debtor without the surety’s consent.
🔹 Section 175 – Discharge of surety by variance in terms of contract between principal debtor and creditor
If the creditor and principal debtor make any contract varying the terms of the contract between the creditor and surety, without the consent of the surety, the surety is discharged.
🔍 Explanation:
This section protects the surety by stating that if the creditor and principal debtor change the terms of their contract (for example, extend time, reduce amount, etc.) without the surety’s approval, then the surety’s liability is automatically discharged.
🧑⚖️ Example:
A guarantees B’s loan from C.
Later, C agrees with B to extend the loan repayment period without informing or getting permission from A (the surety).
Because of this change, A (the surety) is discharged from liability.
📌 Key Points:
Surety’s contract is dependent on the original terms between creditor and principal debtor.
Any change without surety’s consent relieves the surety from liability.
This rule is meant to protect sureties from unfair surprises.
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