contract of surety
contract of suretyship

(1) Creditor institutions owe no duty at common law to a third party who enters into a contract of surety arising per se out of the proposed relationship of creditor and surety.

Contracts of suretyship are not uberrimae fidei.

The earliest known record of a contract of suretyship is a Mesopotamian tablet written around 2750 BC.

Proper performance of a party's obligation discharges not only that obligation but also any obligations accessory to it, such as contracts of suretyship and pledge.

In most common law jurisdictions, a contract of suretyship is subject to the Statute of Frauds (or its equivalent local laws) and is only enforceable if recorded in writing and signed by the surety and the principal.

Similarly, if a father guarantees the debts of his son to the bank (i.e. a contract of suretyship), and the bank elects to call upon the guarantee rather than claiming against the son directly, then if the father pays out on the guarantee, he will become subrogated to the bank's claims against the son.