Suretyship Flashcards
What are rights a surety has upon demand for payment from a creditor?
Offset - offset amounts creditor owes against amount creditor demanding
Exoneration - surety may sue debtor to compel them to pay creditor
What are rights a surety has once he/she makes payment?
Indemnification - surety can demand reimbursement from debtor
Subrogation - surety obtains all creditor claims against debtor
When is a surety released from their obligation?
If the creditor:
Fails to disclose negative info about debtor
Makes agreement with debtor that increases surety’s risk
Releases collateral that secured debt
Extends due date if increases risk
Refuses a tender of payment
Releases debtor unless reserves right against surety
What right does co-surety have?
Right of contribution
