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The liability of a surety in a contract of guarantee is best described as:
APrimary, unconditional, and independent of the principal debtor
BLimited only to half of the principal debtor's liability
CSecondary, contingent, and co-extensive with that of the principal debtor
DRestricted to non-monetary obligations only
Answer & Solution
Correct answer: C. Secondary, contingent, and co-extensive with that of the principal debtor
1. The surety's liability arises only on default of the principal debtor — secondary.
2. It is contingent on that default happening.
3. It is co-extensive — same in extent as the principal debtor's, unless the contract limits it.
_Source: ICMAI BoS CMA Foundation Paper 1 (Business Laws), Module 2 §2.7 (Indemnity/Guarantee/Pledge/Agent), p. 91-99_
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