Also known as: suretyship contracts · suretyship · surety contract · contract of suretyship
Written by attorneys · grounded in primary & secondary sources — see below
A contract by which one party agrees to answer for the duty of another. The agreement creates secondary liability that is enforceable only when supported by consideration and, under the statute of frauds, only when evidenced by a signed writing.
Samuel Soto transfers mortgaged real estate to Samantha Stone with the mortgage balance credited against the purchase price. The mortgagee later grants Samuel an express release from personal liability on the secured obligation. Samuel is discharged from further liability by operation of suretyship defenses.
Sebastian Santos orally promises a creditor that he will pay the debt owed by Sarah Sullivan if she defaults. The creditor extends additional credit in reliance on the promise. The creditor cannot enforce the promise against Sebastian because it is not evidenced by a signed writing.
Select any source to read its text and confirm it supports the definition.
A suretyship contract creates liability for the duty of another rather than a direct obligation of the promisor. The promisor becomes a secondary obligor whose liability is triggered only after the principal defaults.
The statute of frauds applies to any contract to answer for the duty of another. Enforcement is barred unless the agreement is evidenced by a signed writing or an applicable exception exists.
The transferor may be discharged by an express release from the mortgagee or by operation of suretyship defenses when the mortgagee modifies the obligation without consent. These defenses treat the transferor as a secondary obligor after the transfer.