C agrees to appoint B as his clerk to sell goods at a yearly salary upon A's becoming surety to C for B for his conduct of duly accounting for money received by him as such clerk. Afterwards, without A's knowledge or con

CS Executive · Economic, Business and Commercial Laws · PYQS · June 2023
C agrees to appoint B as his clerk to sell goods at a yearly salary upon A's becoming surety to C for B for his conduct of duly accounting for money received by him as such clerk. Afterwards, without A's knowledge or consent, C and B agree that B should be paid commission on the goods to be sold by him and not by a fixed salary. B later misappropriated funds. Discuss the liability of A.

Answer & Explanation:

Section 133 of the Indian Contract Act, 1872 deals with discharge of surety by variance in terms of contract. It states that 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. Thus, as per the facts of the problem 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.

Topics: Indian Contract Act, 1872

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