1896de Book2 Chapter07 Title18

GERMAN CIVIL CODE OF 1896

• Based on the English Translation by: Wang, Chung Hui (1907). The German Civil Code, translated and annotated with historical introduction and appendices. London: Stevens and Sons. [available on Archive.org]

BOOK II. Law of Obligations.

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Chapter VII. Particular Kinds of Obligations.

Title XVIII. Suretyship.

Section 765.

• [I] By a contract of suretyship, the surety binds himself to the creditor of a third party to be responsible for the fulfilment of the obligation of the third party.
• [II] Suretyship may also be assumed for a future or conditional obligation.

Section 766.

• A written statement of the declaration of suretyship is necessary for the validity of the contract of suretyship. Where the surety fulfils the principal obligation all defects of form are cured.

Section 767.

• [I] The extent of the principal obligation at any time determines the obligation of the surety. This applies also, e.g., where the principal obligation becomes altered by the fault or default of the principal debtor. The obligation of the surety is not increased by any juristic act entered into by the principal debtor after the assumption of the suretyship.
• [II] The surety is liable for the costs of notice and suit to be paid by the principal debtor to the creditor.

Section 768.

• [I] A surety may set up all defences belonging to the principal debtor. If the principal debtor dies the surety may not avail himself of the fact that the heir has only a limited liability for the obligation.
• [II] The surety does not lose a defence by reason of the fact that the principal debtor has waived it.

Section 769.

• If several persons make themselves sureties for the same obligation they are liable as joint debtors, even though they do not assume the suretyship in common.

Section 770.

• [I] A surety may refuse to satisfy the creditor so long as the principal debtor has the right to avoid the juristic act on which his obligation is based.
• [II] The surety has the same right, so long as the creditor can satisfy himself by set-off against a matured claim of the principal debtor.

Section 771.

• A surety may refuse to satisfy the creditor so long as the creditor has not attempted compulsory execution against the principal debtor without result (i.e., a plea of beneficium excussionis).

Section 772.

• [I] If a suretyship exists for a money claim compulsory execution on the moveables of the principal debtor must be attempted at his place of domicile, and if the principal debtor's industry is located in another place, also at such other place; in the absence of a domicile and of an industrial location, at the place of his residence.
• [II] If the creditor has a right of pledge or lien on a moveable of the principal debtor, he must also seek satisfaction out of such moveable. If such a right in the thing belongs to the creditor also for another claim, this applies only if both claims are covered by the value of the thing.

Section 773.

• [I] The plea of beneficium excussionis is barred:
• (1) If the surety has waived the plea, e.g., if he has assumed the suretyship in such manner that he is himself a principal debtor;
• (2) If the difficulty of bringing an action against the principal debtor is materially increased in consequence of a change of domicile, industrial location, or place of residence of the principal debtor, occurring after the assumption of the suretyship;
• (3) If bankruptcy proceedings have been instituted against the property of the principal debtor;
• (4) If it may be presumed that compulsory execution on the property of the principal debtor will not lead to the satisfaction of the creditor.
• [II] In the cases provided for by (3) and (4) the plea of beneficium ercussionis is permissible where the creditor can satisfy himself out of a moveable of the principal debtor over which he has a right of pledge or lien; the provision of 772, par. 2, sentence 2, applies.

Section 774.

• [I] Where the surety satisfies the creditor the claim of the creditor against the principal debtor is transferred to him. The transfer may not be enforced to the detriment of the creditor. Defences of the principal debtor arising from a legal relation existing between him and the surety remain unaffected.
• [II] Co-sureties are liable to each other only according to 426.

Section 775.

• [I] If the surety has assumed the suretyship by reason of a mandate of the principal debtor, or if he has the rights of a mandatary against the principal debtor under the provisions relating to management of affairs without mandate on account of the assumption of the suretyship, he can demand from him relief from the suretyship :
• (1) If the pecuniary condition of the principal debtor has become materially worse;
• (2) If the difficulty of bringing an action against the principal debtor is materially increased in consequence of a change of domicile, industrial location, or place of residence of the principal debtor, occurring after the assumption of the suretyship;
• (3) If the principal debtor is in default with the fulfilment of his obligation;
• (4) If the creditor has obtained an executory judgment for fulfilment against the surety.
• [II] If the principal obligation is not yet due the principal debtor may give security to the surety instead of relieving him.

Section 776.

• If the creditor waives a right of preference connected with his claim, or a hypotheca or a right of pledge by which his claim is secured, or his right against a co-surety, the surety is discharged in so far as he could have obtained compensation by virtue of the waived right as provided for in 774. This applies also if the waived right was not created until after the assumption of the suretyship.

Section 777.

• [I] If a surety has assumed his suretyship for an existing obligation for a fixed time he is discharged after the expiration of the fixed time, unless the creditor proceeds without delay to the collection of the claim in conformity with 772, continues the process without serious delay, and, after the termination of the process, notifies the surety without delay that he has recourse to him. If the surety has not the plea of beneficium excussionis he is discharged after the expiration of the fixed time, unless the creditor gives him notice without delay.
• [II] If notice is given in due time the lability of the surety is limited, in the case provided for by par. 1, sentence 1, to the extent of the principal obligation at the time of the termination of the process; in the case provided for by par. 1, sentence 2, to the extent of the principal obligation at the expiration of the fixed time.

Section 778.

• A person who gives a mandate to another to give credit to a third party in his own name and on his own account is liable to the mandatory as a surety for the obligation of the third party arising from the giving of credit.