In an assumption of liability as surety in connection with a contract, the terms of which are not then settled, it is implied that its terms shall be such as will not expose the surety to greater risks than he would incur under those terms which are most common in similar contracts at the place where the principal contract is to be performed.
SuretyshipInterpretation of Suretyship
Section § 2799
This law says that if someone takes on the role of a surety—basically, a guarantor for someone else’s contract—before the contract’s details are final, it’s expected that the surety won't face bigger risks than what's usual for similar contracts in that area. In other words, the surety's risks should be typical, nothing outrageous or unexpected.
assumption of liability surety contract
Section § 2800
This law says that when someone guarantees that a debt will be paid or collected, it means they are assuring that the person who owes the debt has enough money to pay it, and it should be possible to collect that debt through normal legal methods if you act quickly and properly.
A guaranty to the effect that an obligation is good, or is collectible, imports that the debtor is solvent, and that the demand is collectible by the usual legal proceedings, if taken with reasonable diligence.
guaranty solvent debtor collectible obligation
Section § 2801
This law means that if someone guarantees a debt, their guarantee isn't canceled just because the lender didn't try to collect the debt or pursue any related security if these wouldn't have resulted in any payment anyway.
A guaranty, such as is mentioned in the last section, is not discharged by an omission to take proceedings upon the principal debt, or upon any collateral security for its payment, if no part of the debt could have been collected thereby.
guaranty omission principal debt
Section § 2802
If a person who owes money leaves the state without leaving any assets behind to cover their debt, it's treated as if that person is bankrupt. This has important consequences for someone who has guaranteed or co-signed that debt.
In the cases mentioned in Section 2800, the removal of the principal from the State, leaving no property therein from which the obligation might be satisfied, is equivalent to the insolvency of the principal in its effect upon the rights and obligations of the guarantor.
principal removal insolvency effect guarantor obligations
