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Suretyship contracts are discharged in much the same way as other contracts. If the debtor pays, the surety is discharged. The surety also is discharged if the creditor releases the debtor or alters the obligation, as by extending the time of performance, without the surety's consent. But a surety who is required to pay the creditor has a legal right to collect from the principal debtor. If there are cosureties, any cosurety who pays the full debt may get a judgment against the other cosureties for their proportionate share of the debt. Thsi is called the right of contribution.
A creditor who wishes assurance beyond the debtor's promise to pay may demand that a creditworthy third party assume the liablity. This is suretyship, a contractuall relation in which a third party agrees to be primarily liable for the debt or obligation if payment or performance becomes overdue. Three parties are involved. The principal debtor owes the debt or obligation. The creditor is the one to whom the obligation is owed. The surety is the third party who promises to be liable in case of default by the principal debtor. The surety may be bound by an oral contract because a suretyship is a primary obligation. Nevertheless, such agreements usually are put in writing.
Suretyship:
