Creditor’s forbearance to sue does not discharge surety.— Mere forbearance on the part of the creditor to sue the principal debtor or to enforce any other remedy against him does not, in the absence of any provision in the guarantee to the contrary, discharge the surety.
Illustration
B owes to C a debt guaranteed by A. The debt becomes payable. C does not sue B for a year after the debt has become payable. A is not discharged from his suretyship.
Creditor’s delay in suing does not free the surety
If a creditor delays or decides not to sue the main debtor, it does not automatically free the person who has guaranteed the debt (the surety), unless the guarantee agreement specifically says otherwise.
Example
(a) B owes money to C, and A has guaranteed this debt. When the debt becomes due, C does not take any legal action against B for one whole year. Even after this delay, A is still responsible as the guarantor.
(b) R takes a loan from S. T gives a guarantee for R. The loan is due, but S does not take any action against R for 6 months. T is still responsible as the guarantor.
(c) A borrows money from B. C guarantees the loan. B waits for a long time and does not file any case against A. C still has to pay if A does not pay.