Sale of Goods Act
The Contract of sale
Conditions and Warranties
Passing of property
Transfer of title
Performance of the Contract
Rights of Unpaid Seller against goods
Remedies for Breach of Contract
The Indian Partnership Act, 1932 is an act enacted by the Parliament of India to regulate partnership firms in India. It received the assent of the Governor-General on 8 April 1932 and came into force on 1 October 1932. Before the enactment of this act, partnerships were governed by the provisions of the Indian Contract Act. The act is administered through the Ministry of Corporate Affairs. The act is not applicable to Limited Liability Partnerships, since they are governed by the Limited liability Partnership Act, 2008.
Section 2 of the act defines,
(a) an “act of a firm” means any act or omission by all the partners, or by any partner or agent of the firm which gives rise to a right enforceable by or against the firm;
(b) “business” includes every trade, occupation and profession;
(c) “prescribed” means prescribed by rules made under this Act; (c-1) “Registrar” means the Registrar of Firms appointed under sub-section (1) of section 57 and includes the Deputy Registrar of Firms and Assistant Registrar of Firms appointed under sub-section (2) of that section;
(d) “third party” used in relation to a firm or to a partner therein means any person who is not a partner in the firm; and
(e) expressions used but not defined in this Act and defined in the Indian Contract Act, 1872, shall have the meanings assigned to them in that Act.
Partnership refers to an agreement between persons to share their profits or losses arising on account of actions carried by all or one of them acting on behalf of all. The persons who have entered such an agreement are called partners and give their collective business a name, which is necessarily their firm-name. This relation between partners arises out of a contract or an agreement, which means a husband and wife carrying on a business or members of a Hindu undivided family re not into partnership. The share of profits received by any individual from the firm, money received by a lender of money, salary received by a worker or a servant, annuity received by a widow or a child of a deceased partner, does not make them a partner of the firm.
Mode of determining existence of partnership – In determining whether a group of persons is or is not a firm, or whether a person is or is not a partner in a firm, regard shall be had to the real relation between the parties, as shown by all relevant facts taken together. [section 6].
MUTUAL AGENCY IS THE REAL TEST – The real test of ‘partnership firm’ is ‘mutual agency’, i.e. whether a partner can bind the firm by his act, i.e. whether he can act as agent of all other partners.
General Duties of partners
section 9 of Indian Partnership Act, 1932 deals with General duties of partners.
Partners are bound to carry on the business of the firm to the greatest common advantage,
to be just and faithful to each other, and to render true accounts and full information of all things affecting the firm to
any partner or his legal representative.
Duty to indemnify for loss caused by fraud
Section 10 of Indian Partnership Act, 1932 deals with Duty to indemnify for loss caused by fraud.
Every partner shall indemnify the firm for any loss caused to it by his fraud in the conduct of the business of the firm.
Determination of rights and duties of partners by contract between the partners
Section 11 of Indian Partnership Act, 1932 deals with Determination of rights and duties of partners by contract between the partners.
Subject to the provisions of this Act, the mutual rights and duties of the partners of a firm may be determined by contract between the partners, and such contract may be expressed or may be implied by a course of dealing.
Such contract may be varied by consent of all the partners, and such consent may be expressed or may be implied by a course of dealing.
(2) Agreements in restraint of trade. Notwithstanding anything contained in section 27 of the Indian Contract Act, 1872, (9 of 1872) such contracts may provide that a partner shall not carry on any busi- ness other than that of the firm while he is a partner.
The conduct of the business
section 12 of Indian Partnership Act, 1932 deals with The conduct of the business.
Subject to contract between the partners-
(a) every partner has a right to take part in the conduct of the business;
(b) every partner is bound to attend diligently to his duties in the conduct of the business;
(c) any difference arising as to ordinary matters connected with the business may be decided by a majority of the partners, and every partner shall have the right to express his opinion before the matter is decided, but no change may be made in the nature of the business without the consent of all the partners ; and
(d) every partner has a right to have access to and to inspect and copy any of the books of the firm.
Mutual rights and liabilities
Section 13 of Indian Partnership Act, 1932 deals with Mutual rights and liabilities.
Subject to contract between the partners-
(a) a partner is not entitled to receive remuneration for taking part in the conduct of the business;
(b) the partners are entitled to share equally in the profits earned, and shall contribute equally to the losses sustained by the firm ;
(c) where a partner is entitled to interest on the capital subscribed by him such interest shall be payable only out of profits ;
(d) a partner making, for the purposes of the business, any payment or advance beyond the amount of capital he has agreed to subscribe, is entitled to interest thereon at the rate of six per cent. per annum ;
(e) the firm shall indemnify a partner in respect of payments made and liabilities incurred by him-
(i) in the ordinary and proper conduct of the business, and
(ii) in doing such act, in an emergency, for the purpose of protecting the firm from loss, as would be done by a person of ordinary prudence, in his own case, under similar circumstances ; and
(f) a partner shall indemnify the firm for any loss caused to it by his wilful neglect in the conduct of the business of the firm.
The property of the firm
Section 14 of Indian Partnership Act, 1932 deals with The property of the firm.
Subject to contract between the partners, the property of the firm includes all property and rights and interests in property originally brought into the stock of the firm, or acquired, by purchase or otherwise, by or for the firm, or for the purposes and in the course of the business of the firm, and includes also the goodwill of the business.
Unless the contrary intention appears, property and rights and interests in property acquired with money belonging to the firm are deemed to have been acquired for the firm.
Application of the property of the firm
Subject to the contract between the partners, the property of the firm shall be held
and used by the partners exclusively for the purposes of the business.
Personal profits named by partners
section 16 of Indian Partnership Act, 1932 deals with Personal profits earned by partners.
Subject to contract between the partners,-
(a) if a partner derives any profit for himself from any transaction of the firm, or from the use of the property or business connection of the firm or the firm name, he shall account for that profit and pay it to the firm;
(b) if a partner carries on any business of the same nature as and competing with that of the firm, he shall account for and pay to the firm all profits made by him in that business.
Right and duties of partners
Section 17 of Indian Partnership Act, 1932 deals with Rights and duties of partners.
Subject to contract between the partners,-
(a) after a change in the firm, Where a change occurs in the constitution of a firm, the mutual rights and duties of the partners in the reconstituted firm remain the same as they were immediately before the change, as far as may be;
(b) after the expity of the term of the firm, and. Where a firm constituted for a fixed term continues to carry on business after the expiry of that term, the mutual rights and duties of the partners remain the same as they were before the expiry, so far as they may be consistent with the incidents of partnership at will ; and
(c) where additional undertakings are carried out. where a firm constituted to carry out one or more adventures or undertakings carries out other adventures or undertakings, the mutual rights and duties of the partners in respect of the other adventures or undertakings are the same as those in respect of the original adventures or undertakings.
No person shall be introduced as a partner into the firm without the consent of all existing partners…
A person who is introduced as a partner into a firm does not thereby become liable for any act of the firm done before he becomes partner…
(1) An outgoing partner may carry on a business competing with that of the firm and
he may advertise such business, but subject, to contract to the contrary, he may not
(a) use the firm-name,
(b) represent himself as carrying on the business of the firm, or
(c) solicit the custom of persons who were dealing with the firm before he ceased to
be a partner.
A partner may make an agreement with his partners that on ceasing to be a partner he will not carry on any business similar to that of the firm within a specified period
or within specified local limits; and, notwithstanding anything contained in section 27
of the Indian Contract Act, 1872, such agreement shall be valid if the restrictions
imposed are reasonable.
An agent does not act on his own behalf but acts on behalf of his principal. He either represents his principal in transactions with third parties or performs an act for the principal. The question as to whether a particular persons is an agent can be verified by finding out if his acts bind the principal or not.
Sec 182 of the Indian contract act,1872 defines Agent and Principal as:
As per Section 196 of the Indian Contract Act, agency by ratification is said to arise when a person, on whose behalf the acts are done without his knowledge or authority, expressly or impliedly accept such acts.
Agency by operation of law arises where the law treats one person as an agent of another.
Agents are classified in various ways according to the point of view adopted. From the viewpoint of the authority they have, they can be classified as special agents, general agents and universal agents. They are classified as mercantile or commercial agents and non-mercantile or non-commercial agents. There are different various types of kind agents are as follows.
Sub-Agent: Sub-agency denotes delegation of power by an agent to a person appointed by him as sub-agent. Incidentally the agent himself is delegate of his principal. The principal is that ‘a delegate cannot delegate’. According to this, a person to whom powers have been delegate cannot delegate them to another. Section 190 of the Act. Contains this principle. Generally, an agent cannot lawfully employ another to perform acts, which he has expressly. But, if by the ordinary custom of trade, a sub-agent may be employed, the agent may to do so.
A sub-agent, according to section 191, is a person whom the original agent employs in the business of the agency and who under the control of the original agent. Thus the relation of the sub-agent to the original agent is, as between themselves, that of the agent and the principal.
(i.) In case of proper appointment: The agent is responsible to the principal for the acts of the sub-agent. Thus, a commission agent for the sale of goods who makes a proper employment of a sub-agent for selling his principal’s goods is liable to the principal for the fraudulent disposition of the goods by sub-agent within the course of his employment.
(ii.) In the case of appointment without authority: In term of Section 193, the principal is not bound by the acts of the sub-agent, nor is the sub-agent liable to the principal. The agent is the principal of the sub-agent both to the principal and the third party.
Substituted Agent: Substituted agents are different from sub-agents. Section 194 provides that substituted agents are not sub-agents but are in fact agents of the principal. Suppose an agent has an implied authority to name another person to act for the principal in the business of the agency, and he has named another person accordingly. In the circumstances, such a named person is not a sub-agent he is an agent of the principal for such part of the business of the agency as has been entrusted to him.
For Example: A directs B who is a solicitor to sell his estate by auction and to employ an auctioneer for the purpose. B names C, an auctioneer, to conduct the sale. In such a situation, C is not sub-agent, but is A’s agent for the sale.
Special Agents: A special agent is also known as a specific or particular agent. Such agent appointed to perform a particular work or to represents his principal in particular transaction only. As soon as the said period lapses, the agency stands terminated. Specific agents have a limited authority and as soon as the entrusted to him is performed, his authority also comes to an end. A special agent cannot bind his principal in any act other than for which he is specially appointed. If he dose anything outside his authority, his principal cannot be bound by it. The third parties that deal with a special agent must ascertain the extent of the authority he has.
General agents: This type of agents has a general authority to do everything in the course of his agency and he has to perform all the acts in the interest of his principal. Thus, a general agent is one that has authority to do all acts connected with the business of his principal. A manager of a branch shop of a firm or a commission agent is instances of general agents. General agents have an implied authority to bind his principal by doing various acts necessary for carrying on the business of his principal. Sufficiently wide powers are vested in him to affect the business deals, enter into trade bargains, to make purchases and also payments of the purchases, to receive money on behalf of his principal.
Universal Agent: A universal agent has a universal or an unlimited power to act on behalf of his principal. A universal agent is one whose authority is unlimited and who can do any act on behalf of his principal provide such act is legal and is agreeable to the law of land. A universal agent is practically substituted for his principal for all those transactions wherein his principal cannot participate.
For Example: When a person leaves his country for a long time, he may appoint his son, wife or friend as his universal agent to act on his behalf in his absence.
Co-Agents: When a principal appoints two or more persons a agents jointly or severally, such agents are known as co-agents. Their authority is joint when nothing is mentioned about the exercise of their authority. It implies that all co-agents concur in the exercise of their authority unless their authority is fixed. But when their authority is several, any one of the co-agents can act without the concurrence of other.
Auctioneers: An auctioneers is a mercantile agent who is appointed to sell goods on behalf of the principal i.e., seller and for this function, an auctioneer get a reward in the form of a commission. An auctioneer conducts auction on behalf of a seller, as he is primarily the agent of the seller. However, after the sale, he also becomes of the purchaser who gives the highest bid. An auctioneer has no authority to self-the goods of his principal by private contract or contracts.
Besides the above mentioned agents, there are other types of agents also such as brokers, bankers, clearing agents, forwarding agents, underwriter, estate agents, etc. They also play an important role and perform various functions for and on behalf of their principals.
General rule: The general rule is that an agent cannot lawfully employ another act, which he has
expressly or impliedly undertaken to perform personally.
General Rule – No personal liability [ Sec.230]
In the absence of contract to contrary, an Agent cannot –
This is because the Agent merely acts on behalf of his Principal. Thus, he enjoys immunity from being personally sued.
The Agent is personally liable in the following cases –
According to section 201, an agency is terminated by:
Agency May Be Terminated by
A ‘bailment’ is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them.
Based on Benefit Based on Reward
|Exclusive benefit of Bailor||Exclusive benefit of Bailee||Mutual Benefit of both||Gratuitous
|J, neighbour of
K, agrees to look after K’s per while he is out of station. K is benefited.
|Z lends a book to
Y for reading. Y
|A hires furniture
from B, by payment of hire charges, Both A and B are benefited.
nor Bailee gets any
e.g. A lends his book to his are friend.
|Bailor or Bailee
remuneration e.g. G gives his television set for repair to H, a technician. H gets paid for the job.
Essentials of a Valid Contract of Bailment (Sec.148)
Purpose of delivery
Return or disposal of goods
Gratuitous bailment: Bailment without any charges or reward, i.e. –
Non – gratuitous bailment: Bailment for some charges or reward, i.e.-
Disclose faults in goods [Sec. 150]: Bailor is bound to disclose to Bailee, faults in the goods bailed, of which he has knowledge. He should also disclose such information which – (a) materially interferes with the use of goods, or (b) expose the Bailee to extraordinary risk.
|In case of Gratuitous bailment||In case of Non – Gratuitous Bailment|
|Bailor is liable only for those losses which arise due to non – disclosed risks.||Bailor is liable for damages whether or not he was aware of the existence of faults.|
Example: A owning a motorcycle, allows B, his friend, to take it for a joy ride. A knows that its brakes were not proper but does not disclose it to B. B meets with an accident. A is liable to compensate B for damages. But when A had lent the motorcycle on hire, he is liable to B even if he did not know of the failure of his brakes.
Expenses of Bailment
|In case of Gratuitous bailment||In case of Non – Gratuitous Bailment|
|Bailor shall repay to Bailee, all
necessary expenses incurred by him for the purpose of Bailment.
|Bailor is liable to repay only extra –ordinary expenses, and not the ordinary expenses.|
Example: M lends his car to N and it runs out of petrol. N can recover the amount paid for refueling (ordinary expenses). If in case, the car suffers a breakdown, N can recover such charges as are paid by him in bringing it back to condition (extra – ordinary expenses). He M hired the car to N, he shall be liable only for the repair charges, being extra ordinary expenses.
Indemnify the bailee for defective title
Indemnify the bailee for premature termination
Receive back the goods
Duties of a Bailee (Sec.151 to 157)
Take reasonable care
Not to make unauthorized use of goods
Not to mix goods
Goods are mixed with bailor’s consent: The parties shall have a proportionate interest in such mixture.
Goods are mixed without bailor’s consent, but the goods are separable
Goods are mixed without bailor’s consent, and goods are not separable
Return the goods
The bailee must return the goods, without waiting for demand from bailor, if –
if the goods are not so returned, then –
Return accretion to goods
Not to set up an adverse title
Terminate the bailment
Demand back the goods
File suit against wrongdoer
The bailor has the right to sue –
Sue the bailee: The bailor may sue the bailee to enforce his duties.
Right to compensation
The bailee has the right to be indemnified by the bailor, if –
Return the goods
Recover charges incurred
Extra ordinary expenses
Ordinary expenses: If the bailment is gratuitous, the bailor is liable to pay the ordinary necessary expenses, i.e., the bailee has the right to recover the ordinary necessary expenses incurred by him.
Suit for deciding the title: The bailee may apply to the Court for deciding the title to goods, if a person other than the bailor claims that the goods belong to him.
File suit against wrongdoer
The bailee has the right to sue –
Right of lien: The bailee has the right to retain the goods delivered to him until the charges due to him are paid by the bailor.
Basis of distinction
Bailee’s particular lien
Bailee’s general lien
1. Natural of right
Particular lien gives right to retain only such goods in respect of which charges due remain unpaid.
General lien gives right to retain any goods belonging to another person for any amount due from him.
|2. Condition for exercising lien||Particular lien can be exercised only when some labour or skill has been expended on the goods, resulting in an increase in value of goods.||General lien may be exercised even though no labour or skill has been expended on the goods.|
|3. Right to whom?||Every bailee is entitled to particular lien.||General lien can be exercised by only such persons as are specified u/s 171. e.g., bankers, factors, wharfingers, Attomeys of High Court, policy brokers. Any other bailee may exercise general lien if there is an agreement to this effect.|
1. Expiry of specified
When bailment is for specific
Z lends a moped to Y for a
period, it terminates on the
period of 3 months April –
Where bailment is for a specified purpose, it terminates when such purpose is accomplished.
G hires tables and chairs, utensils, etc. from H for organizing his son’s engagement. G shall return
3. Bailee’s act inconsistent with conditions
When bailee does some act which is inconsistent with the terms and conditions of bailment, the Bailor may terminate the bailment.
J gives his car to K keeping it
4. Destruction of
When goods bailed are
K hires a cycle from L. When
• Gratuitous Bailment can
Note: Where premature
Finder of lost goods [Sec 71]: A person, who finds goods belonging to another and takes them into his custody, is subject to the same responsibility as a Bailee.
Implied Agreement: There is an agreement, implied by law between finder and owner of goods.
Duties of Finder: A finder of lost goods is treated as Bailee of goods found. His duties are –
Rights of Finder:
|Suit for specific reward [Sec.168]||
Right of Sale [Sec.169]
Finder of goods is not entitled to sue that owner for compensation for trouble and expenses voluntarily incurred in – (a) preserving the goods, or (b) finding out the owner. However, he is entitled to –
If a thing which is commonly the subject of sale is lost, and
Then, Finder of Goods is entitled to sell the same when –
Pledge can be made of goods only.
There must be delivery of goods by one person to another person.
Purpose of delivery
Return of goods
Right of Retainer [Sec.173]:
Pawnee may retain the goods pledged for –
Retainer for subsequent advances [Sec.174]
Reimbursement of Expenses [Sec.175]:
Where the Pawnee incurs extraordinary expenses to preserve the goods pledged with him, he is entitled to receive such amount from the Pawnor.
Rights in case of default by Pawnor [Sec.176]
Right against true owner of goods [Sec.178A]
Reasonable notice u/s 176 means that a notice of intended sale of the security by the Creditor within a certain date, so as to afford an opportunity to the Debtor to pay the amount within the time mentioned in the notice. Notice of sale is essential and a clause in the agreement excluding the requirement of Notice is inconsistent with the Act & is void and unenforceable.
Pay the debt: The pawnor is liable to pay the debt or perform his promise as the case may be.
Pay deficit on sale:
If the pawnee sells the goods due to default by the pawnor, the pawnor must pay the deficit.
Pay extra – ordinary expenses:
The pawnor is liable to pay to the pawnee any extraordinary expenses incurred by the pawnee for preservation of goods.
Disclose faults in goods: The pawnor is liable to disclose all the faults which
Indemnify the pawnee: If loss is caused to the pawnee due to defect in pawnor’s title to the goods, the pawnor must indemnify the pawnee.
Return the goods: The pawnee must return the goods if the pawnor pays the debt or performs his promise.
Take reasonable care: The pawnee must take such care of goods pledged as a man of ordinary prudence would take care of his own goods.
Not to mix goods: The pawnee must not mix his own goods with the goods pledged.
Return increase in goods: The pawnee must return to the pawnor any accretion to the goods pledged with him.
Redeem the goods pledged
Meaning of redemption: Right to recover back the goods by making payment of the debt or performance of promise.
Time for redemption: Where time of redemption is fixed, the pawnor may exercise redemption –
Enforce pawnee’s duties: The pawnor has the right to enforce the duties of pawnee, if the pawnee fails to fulfill his duties.
Receive increase in goods: The pawnor has the right to recover from pawnee any increase in goods pledged.
Right to receive notice of sals: In case of default by the pawnor to pay the debt or perform his promise, the pawnee has the right to sell the goods, after giving a reasonable notice to the pawnor. If the pawnee fails to give notice, the pawnor has the right to recover the loss incurred by him.
Pledge is bailment of goods
Bailment may be for purpose
Sale of Goods
Pawnee, i.e. Pledgee has a right of sale of goods pledged
There is no right of sale to the
Use of Goods
Pledgee has no right of using goods pledged.
Bailee can use the goods bailed as per terms of contract.
Indemnity Meaning –
A contract is called as a ‘contract of indemnity’ if –
One party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person.
Contract: All the essentials of a valid contract must also be present in the contract of indemnity
Example:- X asks Y to beat Z and promises to indemnify Y against the consequences. Y beats Z and is fined Rs.1,000. Y cannot claim this amount from X because the object of the agreement was unlawful.
Loss to one party: A person can indemnify another person only if such other person incurs some loss or it has become certain that he will incur some loss.
Indemnity by the Promisor: The purpose of contract of indemnity is to protect the indemnity holder from any loss that may be caused to the indemnity holder.
Reason for loss: The contract of indemnity must specify that indemnity holder shall be protected from the loss caused due to –
Right to recover damages
The indemnity holder has the right to recover all the damages which he is compelled to pay in any suit in respect of any matter covered by the contract of indemnity.
Right to recover costs
The indemnity holder has the right to recover all the costs which he is compelled to pay in bringing or defending such suit.
Condition: The indemnifier authorised him to bring or defend the suit; or
The indemnity holder did not contravene the orders of the indemnifier; and The indemnity holder acted as it would have been prudent for him to act in the absence of any contract of indemnity.
Right to recover sums paid
Meaning of ‘contract of guarantee’
A ‘contract of guarantee’ is a contract to –
Meaning of ‘surety’: The person who gives the guarantee is called as ‘surety’
Meaning of ‘principal debtor’: The person in respect of whose default the guarantee is given is called as ‘principal debtor’.
Meaning of ‘creditor’: The person to whom the guarantee is given is called as ‘creditor’.
Must have all the essentials of a valid contract: All the essentials of a valid contract must be present in the contract of guarantee.
Primary liability of some person
The contract must be conditional
Form of contract
A contract of guarantee may be either oral or written.
Joining of other co-sureties
The guarantee by a surety is not valid if –
Surety’s liability is coextensive with liability of principal debtor
General rule –
Commencement of surety’s liability
The liability of surety arises immediately on default by the principal debtor.
The creditor is not required to –
Surety’s liability may be limited
The surety may fix a limit on his liability up to which the guarantee shall remain effective.
Surety’s liability may be continuous
The surety may agree to become liable for a series of transactions of continuous
nature. However, the surety may fix –
Surety’s liability may be conditional
The surety may impose certain conditions in the contract of guarantee. Until those conditions are met, the surety shall not be liable.
Meaning: A guarantee which extends to a series of transactions is called as continuing guarantee.
Continuing guarantee may be revoked, at anytime, by the surety by giving a notice to the creditor. However, revocations shall be effective only in respect of future transactions (i.e. the liability of the surety with regard to previous transactions remains unaffected)
Death of surety (sec. 131): Death of the surety operates as a revocation of a continuing guarantee as to future transaction.
Right of indemnity
Right of subrogation
Right of subrogation
Right of set off
Rights to share reduction
Rights to contribution
General Rule: All the co-sureties shall contribute equally
Right to share benefit of securities
|Basis||Contract of indemnity||Contract of guarantee|
|Meaning||A contract by which one partypromises to save the other from loss caused to him is called as a contract of indemnity.||A contract of guarantee is acontract to perform the promise, or discharge the liability of a third person in case of his default.|
|Parties||There are only two parties, viz, the indemnifier and the indemnity holder.||There are three parties, viz., the principal debtor, creditor and the surety.|
|Nature of liability||The liability of the indemnifier is primary and independent.||The liability of the surety is secondary and conditional.|
|Number of contract||In a contract of indemnity there is only one contract.||In the contract of guarantee, there are three contracts; first between principal debtors and creditor, second between creditor and surety, and third between surety and principal debtor.|
|Nature of contract||The contract of indemnity is for the reimbursement of the loss.||The contract of guarantee is for the security of the creditor.|
|DISCHARGE OF SURETY|
|Revocation of contract of guarantee||Invalidation of contract of guarantee||Conduct of Creditor|
A specific guarantee can be revoked only if liability of principal debtor has not
A continuing guarantee can be revoked only in respect of future transactions.
Death of surety
In case of death of surety, a continuing guarantee is automatically revoked in respect of future transactions.
Variance in terms If –
Release or discharge of principal debtor
Composition with principal debtor
The surety is discharged if the creditor makes a composition with the principal debtor without obtaining the consent of surety.
Giving extension of time to principal debtor
The surety is discharged if the creditor extends the time for repayment of the debt by the principal debtor without obtaining the consent of the surety.
Loss of security by a creditor
The surety is discharged to the extent of security lost by the creditor.