Section 138 The Indian Contract Act, 1872
📜 Section 138 – The Indian Contract Act, 1872
Section 138: Release of one co-surety does not discharge others
"Where there are co-sureties, a release by the creditor of one of them does not discharge the others; neither does it free the surety so released from his responsibility to the other sureties."
✅ Explanation:
A co-surety is one of two or more persons who have jointly guaranteed the performance or debt of a third party.
If the creditor releases one co-surety, the other co-sureties are still liable for the debt or obligation.
The released surety may still have responsibility toward other co-sureties, especially if contribution is involved.
🧾 Example:
A, B, and C are co-sureties for a loan taken by D. If the creditor releases C from the contract, A and B are still liable to pay the debt. Also, C can still be required to contribute his share to A and B if they end up paying the full debt.
🔍 Key Points:
The release by the creditor does not eliminate overall liability.
Ensures fairness among co-sureties.
Protects the rights of remaining sureties to claim contribution.
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