Guarantee on contract that creditor shall not act on it until co-surety joins.— Where a person gives a guarantee upon a contract that the creditor shall not act upon it until another person has joined in it as co-surety, the guarantee is not valid if that other person does not join.
Guarantee not valid if co-surety does not join
If a person gives a guarantee on the condition that the creditor will use it only after another person also agrees to become a co-surety, then the guarantee will not be valid if that second person never joins.
In simple words: If someone says, “I will be a guarantor only if another person also becomes a guarantor,” and that other person does not agree, then the guarantee has no legal effect.
Example 1:
(a) R says, “I will guarantee this loan only if S also guarantees it.” If S does not join as a co-guarantor, R’s guarantee is not valid. The bank cannot hold R responsible because his promise was conditional on S joining.
Example 2:
A shopkeeper, D, promises to pay the supplier if the supplier gives goods on credit, but only if his friend S also promises the same. If S refuses, D’s promise cannot be enforced.
Example 3:
M tells a landlord, “I will act as a guarantor for the rent only if my colleague joins as co-guarantor.” If the colleague does not join, M is not legally responsible for the rent.