THE RESPONSIBILITY OF A SURETY UNDER THE CURRENT SURETYSHIP LAW

Abstract

Prior to concluding a loan agreement, a creditor may demand a debtor to show any securities to satisfy the creditor against a chance of a breach of a loan agreement. Securities that are commonly shown include persons under the suretyship agreement and properties under the pledge and mortgage agreements. Under the previous civil and commercial code on a suretyship agreement, a creditor was allowed to address contractual terms for his own benefits, such as the surety shall be bound jointly with the debtor. Such term makes a surety to be obligated to a creditor as a co-principal debtor, which lets a surety to undertake difficulties equally or greater than a principal debtor in the event that a surety does not have any benefits in return. It is observed that the previous civil and commercial code concerning a suretyship agreement was outdated and unfair for a surety. Recently the National Legislative Assembly has enacted the act amending the civil and commercial code (No.20) in B.E. 2557 and (No.21) in B.E. 2558 with the purposes to amend the extent of responsibility and obligation of a surety and solve the problem of unfairness. Thus, this article intended to analyze the extent of responsibility and obligation of a surety the current law concerning a suretyship agreement.