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On paying the guaranteed debt, the surety acquires all the rights the creditor had against the principal debtor. This right is called:
ARight of indemnity
BRight of subrogation (Section 140)
CRight of set-off
DRight of contribution
Answer & Solution
Correct answer: B. Right of subrogation (Section 140)
Section 140 gives the surety, upon payment, the right of subrogation: he steps into the creditor's shoes and may enforce the creditor's rights against the principal debtor.
Related questions
Under Section 146, in the absence of a contrary agreement, co-sureties for the same debt aUnder Section 141, a surety is entitled to the benefit of every security the creditor holdUnder Section 139, if the creditor does an act inconsistent with the surety's rights, or oUnder Section 137, mere forbearance by the creditor to sue the principal debtor:Under Section 135, a contract by which the creditor compounds with, gives time to, or promUnder Section 134, the surety is discharged when the creditor:Under Section 133, a variance in the terms of the contract between creditor and principal Under Section 131, in the absence of a contrary contract, the death of the surety: