A suretyship obligation is to be deemed unconditional unless its terms import some condition precedent to the liability of the surety.
SuretyshipLiability of Sureties
Section § 2806
This law means that if someone agrees to be a surety, which is like a guarantor for another person's debt or obligation, their promise to pay is considered automatic and without conditions, unless the agreement specifically states otherwise. This means the surety can't claim they're not responsible unless there was a condition written into the agreement that needed to happen first.
suretyship obligation unconditional surety conditional surety
Section § 2807
This law states that if someone, called a surety, promises to pay or fulfill obligations on behalf of another person, called the principal, they must immediately take responsibility if the principal fails to meet their obligations, without needing to be asked or told by the creditor.
A surety who has assumed liability for payment or performance is liable to the creditor immediately upon the default of the principal, and without demand or notice.
surety liability immediate responsibility principal default
Section § 2808
If you agree to be a surety, which means promising to pay someone else's debt if they don't, your responsibility is equal to the person who owes the debt. You don't have to be notified if they fail to pay, unless you couldn't reasonably find out on your own, and the lender actually knows about the failure to pay.
Where one assumes liability as surety upon a conditional obligation, his liability is commensurate with that of the principal, and he is not entitled to notice of the default of the principal, unless he is unable, by the exercise of reasonable diligence, to acquire information of such default, and the creditor has actual notice thereof.
surety liability conditional obligation notice of default
Section § 2809
If someone (a surety) is guaranteeing another person's debt or duty, they can't be required to pay any more money or take on more responsibility than the original person who owes the debt or duty (the principal). If the surety's obligation seems higher, it should be reduced to match the original obligation.
The obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; and if in its terms it exceeds it, it is reducible in proportion to the principal obligation.
surety obligation principal obligation debt guarantee
Section § 2810
This law states that if someone has guaranteed another person's obligation (the surety), they're still responsible even if the main person in the contract (the principal) cannot fulfill their part due to a personal issue that makes the contract void against them. However, the guarantor isn't responsible if the principal never had any liability to begin with unless the guarantor knew about the principal's defense when they agreed to be liable. If the original agreement is undone and the creditor gets back what they offered in the contract, this changes the guarantor's responsibility just like it would in regular sales law.
A surety is liable, notwithstanding any mere personal disability of the principal, though the disability be such as to make the contract void against the principal; but he is not liable if for any other reason there is no liability upon the part of the principal at the time of the execution of the contract, or the liability of the principal thereafter ceases, unless the surety has assumed liability with knowledge of the existence of the defense. Where the principal is not liable because of mere personal disability, recovery back by the creditor of any res which formed all or part of the consideration for the contract shall have the effect upon the liability of the surety
which is attributed to the recovery back of such a res under the law of sales generally.
surety liability principal's personal disability contract void
Section § 2811
This law says that if someone needs to provide a financial guarantee (like a bond), they can arrange with their guarantor (called a surety) to keep the money or assets in a secure place, like a bank. Whatever money or assets are stored cannot be taken out without the guarantor's consent or a court order. Even with this setup, the original responsibilities and liabilities of the person and the guarantor as outlined in the bond remain the same.
Any party required to give a bond undertaking or other obligation may agree with his surety for the deposit of any money and assets for which the surety is responsible with a bank, savings bank, safe deposit, or trust company authorized by law to do business as such, or other depository approved by the court or a judge thereof, if such deposit is otherwise proper, for the safekeeping of such money and assets and in such manner as to prevent the withdrawal of any or all such money and assets without the written consent of the surety, or an order of court or a judge thereof, made on such notice to the surety as the court or judge may direct. Such agreement shall not in any
manner release, or change the liability of, the principal or surety as established by the terms of the bond.
bond undertaking surety agreement deposit assets
