Title 28

A mere offer of guaranty is not binding until notice of its acceptance is communicated by the guarantee to the guarantor, but an absolute guaranty is binding upon the guarantor without notice of acceptance.

A guaranty is to be deemed unconditional unless its terms import some condition precedent to the liability of the guarantor.

(1) A guaranty relating to a future liability of the principal under successive transactions that either continue the principal's liability or from time to time renew it after it has been satisfied is called a continuing guaranty. (2) A continuing guaranty may be revoked at any t…

The obligation of a guarantor must be neither larger in amount nor in other respects more burdensome than that of the principal, and if in its terms it exceeds it, it is reducible in proportion to the principal obligation.

In a guaranty of a contract the terms of which are not then settled, it is implied that the guaranty's terms will not expose the guarantor to greater risks than the guarantor would incur under those terms that are most common in similar contracts at the place where the principal …

A guarantor is not liable if the contract of the principal is unlawful, but the guarantor is liable notwithstanding any mere personal disability of the principal, even though the disability would make the contract void against the principal.

(1) A guaranty to the effect that an obligation is good or is collectible imports that the debtor is solvent and that the demand is collectible by the usual legal proceedings if taken with reasonable diligence. (2) A guaranty such as is mentioned in subsection (1) is not discharg…

A guarantor of payment or performance is liable to the guarantee immediately upon the default of the principal and without demand or notice.

If a person guarantees a conditional obligation, the person's liability is commensurate with that of the principal and the person is not entitled to notice of the default of the principal unless the person is unable, by the exercise of reasonable diligence, to acquire information…

(1) A guarantor is exonerated, except so far as the guarantor may be indemnified by the principal, if by any act of the creditor not authorized by the original guaranty instrument or without the separate consent of the guarantor, the original obligation of the principal is altere…

The rescission of an agreement altering the original obligation of a debtor or impairing the remedy of a creditor does not restore the liability of a guarantor who has been exonerated by such agreement.

Mere delay on the part of a creditor to proceed against the principal or to enforce any other remedy does not exonerate a guarantor.

A guarantor is not exonerated by the discharge of the guarantor's principal by operation of law without the intervention or omission of the creditor.

A guarantor who has been indemnified by the principal is liable to the creditor to the extent of the indemnity notwithstanding that the creditor, without the assent of the guarantor, may have modified the contract or released the principal.

The acceptance by a creditor of anything in partial satisfaction of an obligation reduces the obligation of a guarantor thereof in the same measure as that of the principal but does not otherwise affect it.

Indemnity is a contract by which one engages to save another from a legal consequence of the conduct of one of the parties or of some other person.

An agreement to indemnify a person against an act thereafter to be done is void if the act be known by such person, at the time of doing it, to be unlawful.

An agreement to indemnify a person against an act already done is valid, even though the act was known to be wrongful, unless it was a felony.

An agreement to indemnify against the acts of a certain person applies not only to the person's acts and their consequences but also to those of the person's agents.

An agreement to indemnify several persons applies to each unless a contrary intention appears.

(Temporary) Person indemnifying liable jointly and severally. Except as provided in 27-1-703, one who indemnifies another against an act to be done by the latter is liable jointly with the person indemnified and separately to every person injured by such act. (Terminates on occur…

If a person at the request of another engages to answer in damages, whether liquidated or unliquidated, for any violation of duty on the part of the latter, the person is entitled to be reimbursed in the same manner as a surety for whatever the person may pay.

In the interpretation of a contract of indemnity, the rules prescribed in 28-11-314 through 28-11-317 are to be applied unless a contrary intention appears.

(1) Upon an indemnity against liability, expressly or in other equivalent terms, the person indemnified is entitled to recover upon becoming liable. (2) Upon an indemnity against claims, demands, damages, or costs, expressly or in other equivalent terms, the person indemnified is…

An indemnity against claims, demands, or liability, expressly or in other equivalent terms, embraces the costs of defense against such claims, demands, or liability incurred in good faith and in the exercise of a reasonable discretion.

The person indemnifying is bound, on request of the person indemnified, to defend actions or proceedings brought against the person indemnified in respect to the matters embraced by the indemnity, but the person indemnified has the right to conduct defenses if the person indemnif…

(1) If the person indemnifying, whether the person is a principal or a surety in the agreement, does not have reasonable notice of the action or proceeding against the person indemnified or is not allowed to control the person indemnified's defense, judgment against the person in…

A surety is one who, at the request of another person and for the purpose of securing to the other person a benefit, becomes responsible for the performance by the other person of some act in favor of a third person or pledges property as security for the performance.

A person who appears to be a principal, whether by the terms of a written instrument or otherwise, may show that the person is in fact a surety except as against persons who have acted on the faith of the person's apparent character of principal.

In interpreting the terms of a contract of suretyship, the same rules are to be observed as in the case of other contracts.

Notwithstanding the recovery of judgment by a creditor against a surety, the latter still occupies the relation of surety.

A surety cannot be held beyond the express terms of the surety's contract, and if the contract prescribes a penalty for breach, the surety cannot in any case be liable for more than the penalty.

A surety is exonerated: (1) in like manner with a guarantor; (2) to the extent to which the surety is prejudiced by any act of the creditor that would naturally prove injurious to the remedies of the surety or inconsistent with the surety's rights or that lessens the surety's sec…

Performance of the principal obligation or an offer of such performance, duly made as provided in this code, exonerates a surety.

A surety has all the right of a guarantor, whether the surety becomes personally responsible or not.

A surety may compel the surety's principal to perform the obligations when due.

A surety may require the surety's creditor to proceed against the principal or to pursue any other remedy in the surety's power that the surety cannot pursue and that would lighten the surety's burden, and if the creditor neglects to do so, the surety is exonerated to the extent …

(1) If a surety satisfies the principal obligation or any part of the principal obligation, whether with or without legal proceedings, the principal is bound to reimburse what the surety has disbursed, including necessary costs and expenses, but the surety does not have a claim f…

A surety is entitled to the benefit of every security for the performance of the principal obligation held by the creditor or by a cosurety at the time of entering into the contract of suretyship or acquired by the creditor or cosurety afterwards, whether the surety was aware of …

A creditor is entitled to the benefit of everything which a surety has received from the debtor by way of security for the performance of the obligation and may, upon the maturity of the obligation, compel the application of such security to its satisfaction.

Whenever property of a surety is hypothecated with property of the principal, the surety is entitled to have the property of the principal first applied to the discharge of the obligation.