Guarantee and suretyship are similar concepts but have key distinctions. A guarantee is collateral and makes the guarantor primarily liable if the principal debtor cannot pay, while suretyship creates an original obligation making the surety secondarily liable if the principal does not pay. Additionally, a guarantor ensures the debtor's solvency and can avail certain benefits in legal proceedings, whereas a surety ensures the debt and cannot avail the same benefits.
Guarantee and suretyship are similar concepts but have key distinctions. A guarantee is collateral and makes the guarantor primarily liable if the principal debtor cannot pay, while suretyship creates an original obligation making the surety secondarily liable if the principal does not pay. Additionally, a guarantor ensures the debtor's solvency and can avail certain benefits in legal proceedings, whereas a surety ensures the debt and cannot avail the same benefits.
Guarantee and suretyship are similar concepts but have key distinctions. A guarantee is collateral and makes the guarantor primarily liable if the principal debtor cannot pay, while suretyship creates an original obligation making the surety secondarily liable if the principal does not pay. Additionally, a guarantor ensures the debtor's solvency and can avail certain benefits in legal proceedings, whereas a surety ensures the debt and cannot avail the same benefits.
Guarantee and Suretyship? Guaranty is collateral while Surety is an original promissory undertaking. In guaranty, the guarantor is primarily liable while in suretyship, the surety is secondarily available.
The guarantor binds himself to pay if the principal cannot
pay. The surety undertakes to pay if the principal does not pay. The guarantor is the insurer of the solvency of the debtor. The surety is the insurer of the debt. The guarantor can avail of the benefit of excussion and division in case the creditor proceeds against him. The surety cannot avail of the benefit of excussion and division.