Credit & Consumer Law

Surety / Suretyship

A person who agrees to be responsible for another person's debt or obligation if that person defaults. Suretyship is a contract between the surety and the creditor.

Legal Definition

A surety (also called a guarantor) binds themselves to pay a creditor if the principal debtor defaults. Under South African law, suretyship must be in writing to be valid (General Law Amendment Act 50 of 1956). A surety binds themselves to the same extent as the principal debtor unless the suretyship is limited in amount or scope.

📖 Constitutional / Statutory Basis: Section 34 (contract enforcement)

Practical Example

A bank requires a director to sign personal surety for a company loan. If the company defaults, the bank can sue the director personally for the outstanding balance without first pursuing the company.

Frequently Asked Questions

Can I be held liable as surety even if the creditor did not exhaust remedies against the principal debtor first?

Yes, unless the suretyship contains a "benefit of excussion" clause requiring the creditor to first exhaust remedies against the principal debtor. Without this clause, the surety can be sued immediately.

Does signing surety affect my credit record in South Africa?

A suretyship itself may not appear on your credit record, but if the principal debtor defaults and the creditor obtains judgment against you as surety, that judgment will appear on your credit record.

Related Terms

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