Chapter VIII - Of Indemnity and Guarantee
Section 133
Section 133: Variation of the guaranteed contract
A non-consensual variation of the principal contract can discharge the surety for transactions subsequent to that variation.
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This article is for general information. Refer to the Indian Contract Act, 1872 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
Any variance, made without the surety’s consent, in the terms of the contract between the principal debtor and the creditor, discharges the surety as to transactions subsequent to the variance.
Illustrations
(a) A becomes surety to C for B’s conduct as a manager in C’s bank. Afterwards, B and C contract, without A’s consent, that B’s salary shall be raised, and that he shall become liable for one-fourth of the losses on overdrafts. B allows a customer to overdraw, and the bank loses a sum of money. A is discharged from his suretyship by the variance made without his consent, and is not liable to make good this loss.
(b) A guarantees C against the misconduct of B in an office to which B is appointed by C, and of which the duties are defined by an Act of the Legislature. By a subsequent Act, the nature of the office is materially altered. Afterwards, B misconducts himself. A is discharged by the change from future liability under his guarantee, though the misconduct of B is in respect of a duty not affected by the later Act.
(c) C agrees to appoint B as his clerk to sell goods at a yearly salary, upon A’s becoming surety to C for B’s duly accounting for moneys received by him as such clerk. Afterwards, without A’s knowledge or consent, C and B agree that B should be paid by a commission on the goods sold by him and not by a fixed salary. A is not liable for subsequent misconduct of B.
(d) A gives to C a continuing guarantee to the extent of 3,000 rupees for any oil supplied by C to B on credit. Afterwards B becomes embarrassed, and, without the knowledge of A, B and C contract that C shall continue to supply B with oil for ready money, and that the payments shall be applied to the then, existing debts between B and C. A is not liable on his guarantee for any goods supplied after: this new arrangement.
(e) C contracts to lend B 5,000 rupees on the 1st March. A guarantees repayment. C pays the 5,000 rupees to B on the 1st January. A is discharged from his liability, as the contract has been varied, inasmuch as C might sue B for the money before the 1st of March.
Rule and business relevance
The provision addresses changes to the terms between principal debtor and creditor without the surety’s consent. The illustrations show why changes in duties, remuneration or timing matter to the risk accepted.
Limits and related provisions
Do not erase all historic liability without analysing the timing. Examine actual consent, guarantee terms and the transaction affected by the change.
Hypothetical business example
Hypothetical example: A creditor and debtor change the agreed credit arrangement without the surety’s consent. Later supplies require a discharge analysis distinct from earlier transactions.
Practical decision flow
Compare the original and varied terms.
Locate evidence of the surety’s consent or its absence.
Separate subsequent transactions from liabilities predating the variation.
Check the applicable legal framework
This guide explains the central provision. Applicable State amendments, the agreement, transaction date and other governing laws can affect its application. Check the current legal framework before relying on it for a commercial decision.
Practical checklist
Do
- Compare the original and varied terms.
- Locate evidence of the surety’s consent or its absence.
- Separate subsequent transactions from liabilities predating the variation.
Avoid
- Do not erase all historic liability without analysing the timing. Examine actual consent, guarantee terms and the transaction affected by the change.
Glossary
- Variance
- A change to the terms of the principal debtor–creditor contract.
- Subsequent transaction
- A transaction occurring after the relevant variation.
Frequently asked questions
Is the surety’s consent relevant?
Yes. The statutory rule concerns variance made without it.
Does the section expressly cancel every earlier transaction?
No. It speaks of transactions subsequent to the variance.
Can changing performance timing matter?
Yes. The early-disbursement illustration shows that timing changes may alter the accepted risk.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026