Indian Contract Act Section 137 — Creditor’s forbearance to sue does not discharge surety
CHAPTER VIII OF INDEMNITY AND GUARANTEE
Commercial / Corporate
Summary
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.
This section explains that if a creditor simply chooses not to sue the principal debtor or not to enforce any other legal remedy against them, that inaction alone does not release the surety from their obligation under the guarantee. The surety remains liable unless the guarantee itself contains a specific term stating otherwise. In other words, the creditor’s delay or decision not to take legal action does not, by itself, free the surety from their responsibility.
Official Text
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