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Simple English definitions for legal terms
suretyship
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A quick definition of suretyship:
Suretyship is when one person promises to pay for someone else's debt or mistake. This means that both people are responsible for the debt or mistake at the same time. The purpose of suretyship is to protect against loss if the person who owes the debt cannot pay it back. There are different types of suretyship, such as when someone offers their property as a guarantee or when the law creates the suretyship.
A more thorough explanation:
Suretyship is a legal relationship where one party agrees to take responsibility for a debt, default, or other failure of another party. This means that both parties become liable for the debt at the same time. There are different types of suretyship:
- Involuntary suretyship: This type of suretyship arises incidentally when the main purpose of the contract is to achieve some other goal.
- Personal suretyship: In this type of suretyship, the surety is responsible for paying damages if the debtor defaults.
- Real suretyship: This type of suretyship allows specified property to be taken, but the surety is not responsible for paying damages.
- Suretyship by operation of law: This type of suretyship is created by the law when a third party promises to assume and pay the debt owed by a debtor to a creditor.
- Voluntary suretyship: This type of suretyship is created when the main purpose of the contract is to make one party a surety.
For example, if a person wants to rent an apartment but does not have a good credit score, they may need a surety to guarantee that they will pay the rent on time. The surety would become liable for the rent if the tenant fails to pay. This is an example of personal suretyship.