Surety’s liability.— The liability of the surety is co- extensive with that of the principal debtor, unless it is otherwise provided by the contract.
Illustration
A guarantees to B the payment of a bill of exchange by C, the acceptor. The bill is dishonoured by C. A is liable, not only for the amount of the bill, but also for any interest and charges which may have become due on it.
Surety’s Liability (Responsibility of the Guarantor)
The responsibility of the surety (guarantor) is the same as the responsibility of the main borrower (principal debtor), unless the contract says something different.
Example
A promises B that he will pay the money if C does not pay. C fails to pay the bill. Now A must pay:
- the full bill amount, and
- any interest and extra charges on it.
In short: If the borrower does not pay, the guarantor has to pay everything, just like the borrower.