LEGAL EFFECTS OF THE FRAUD ORIGINATING FROM THE CO-SURETY ON THE VALIDITY OF THE SURETY CONTRACT AND/OR THE RIGHTS OF THE SURETY (THE VICTIM OF THE FRAUD) Cover Image

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LEGAL EFFECTS OF THE FRAUD ORIGINATING FROM THE CO-SURETY ON THE VALIDITY OF THE SURETY CONTRACT AND/OR THE RIGHTS OF THE SURETY (THE VICTIM OF THE FRAUD)

Author(s): Snežana Dabić
Subject(s): Civil Law
Published by: Правни факултет Универзитета у Београду
Keywords: Surety; Validity of the contract; Third party’s fraud; Mistake as to the solvency of the debtor; The relation between co-sureties;

Summary/Abstract: In case a surety concludes a contract due to fraudulent acts of his co-surety, he may find himself in a rather unenviable position. Remedies for his protection are very limiting. Namely, third parties’ fraud only exceptionally leads to the annulment of the contract: if the contracting party is guilty of fraud; or the contract is gratuitous, which is very questionable for surety contract. The chances for annulment are even fewer if we apply the rules of mistake: mistake as to the debtor solvency represents a mistake as to the motif which is only exceptionally legally relevant. Finally, the right to ask damages from co-surety can also be of limited nature: firstly, there is a risk that the damages cannot be compensated; secondly, an absurd situation may occur that the victim of the fraud cannot reject the contribution claim from the co-surety but he may later on ask damages from him.

  • Issue Year: 68/2020
  • Issue No: 1
  • Page Range: 126-145
  • Page Count: 20
  • Language: Serbian
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