Chapter on Suretyship
Suretyship is valid only when offered by someone who is legally competent to transact.1 The creditor may seek payment from whichever of the two he prefers—principal or guarantor—both during their lifetimes and after their deaths. If the principal’s liability is discharged,2 the guarantor is automatically released as well, but not the other way around.
The guarantor does not have to know either the debtor or the creditor; what matters is the guarantor’s own consent.3
One may guarantee an unspecified obligation provided that it will eventually be determined—such as items lent for use, usurped goods, merchandise taken for inspection, and the warranty for defects in a sale.4 There is no suretyship for property held merely in trust; liability arises only when the trustee oversteps the limits.