SURETY AS A MEANS OF SECURING THE OBLIGATIONS

Abstract

The topic of the paper “Surety as a Means of Securing the Obligations” is widely discussed in the modern society and there are different interpretations.

Surety as a type of securing the obligations is mentioned even in Roman civil law, which fact indicates that the history of this legal institute of rights goes thousands of years back. In the Ancient Rome the verbal agreements, which later evolved into specific contracts, contained also surety as a type of agreement. In accordance with the Civil Law, surety is a contractually undertaken obligation to bear responsibility to creditor for the debt of a third party, without releasing the latter from their obligations to the creditor. Thus, surety is a duty undertaken by the surety provider, which ensures the fulfillment of obligations of the main debtor to its creditor.

The author of the paper comes to the conclusion that as the providing of surety might seem a rather simple process of signing some papers, actually it is not so simple, because at the moment, when the debtor will not be able to fulfill their obligations, the creditor shall demand the fulfillment of obligations from the surety provider. Usually the liability of the surety provider is not endless. It is closely related to the liability of the debtor regarding the payment of a debt or fulfillment of any other obligations. It means that surety is limited by a certain amount of money, which can be demanded from the debtor.

The Civil Law does not contain any special regulations regarding surety. Thus according to the currently effective legislation, a guarantee and a surety can be perceived as synonymous terms, unless any normative act provides otherwise. Yet a guarantee differs from a surety by the term of its validity: A guarantee remains valid even in cases, when the main contract has been admitted invalid. Thus there is a need for a more specified definition of guarantee in the normative acts.