SURETYSHIP
suretyship.1. The legal relation that arises when one party assumes liability for a debt, default, or other failing of a second party. ? The liability of both parties begins simultaneously. In other words, under a contract of suretyship, a surety becomes a party to the principal obligation.
¡ª Also termed (archaically) pledgery. [Cases: Principal and Surety 1, 65, 66. C.J.S. Principal and Surety ¡ì¡ì 2¨C5, 70, 72.]
2. The lending of credit to aid a principal who does not have sufficient credit. ? The purpose is to guard against loss if the principal debtor were to default.
3. The position or status of a surety.
involuntary suretyship. A suretyship that arises incidentally, when the chief object of the contract is to accomplish some other purpose. [Cases: Principal and Surety 11. C.J.S. Principal and Surety ¡ì¡ì 24, 33.]
personal suretyship. A suretyship in which the surety is answerable in damages. [Cases: Principal and Surety 65. C.J.S. Principal and Surety ¡ì 70.]
real suretyship. A suretyship in which specified property can be taken, but the surety is not answerable in damages. [Cases: Principal and Surety 65. C.J.S. Principal and Surety ¡ì 70.]
suretyship by operation of law. A suretyship that the law creates when a third party promises a debtor to assume and pay the debt that the debtor owes to a creditor. [Cases: Principal and Surety 14. C.J.S. Principal and Surety ¡ì 35.]
voluntary suretyship. A suretyship in which the chief object of the contract is to make one party a surety.
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