{"id":897098,"date":"2020-02-20T11:38:29","date_gmt":"2020-02-20T18:38:29","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=897098"},"modified":"2020-02-20T11:38:35","modified_gmt":"2020-02-20T18:38:35","slug":"obscure-important-surety-guarantee-rules","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/obscure-important-surety-guarantee-rules\/","title":{"rendered":"Obscure But Important Surety and Guarantee Rules"},"content":{"rendered":"\n<p>Joe Virene | <a href=\"https:\/\/www.texasconstructionlawblog.com\/2020\/02\/obscure-but-important-surety-and-guarantee-rules\/\">Gray Reed &amp; McGraw<\/a><\/p>\n\n\n\n<p>Texas surety law contains obscure procedural rules that can have outsized consequences. Chapter 43 of the Civil Practice and Remedies Code is an important example.<\/p>\n\n\n\n<p><strong><em>Applicability<\/em><\/strong><\/p>\n\n\n\n<p>This chapter applies to everything that is a \u201csurety\u201d as defined by the statute. The statute\u2019s definition includes \u201can endorser, a guarantor, and a drawer of a draft that has been accepted; and \u2026every other form of suretyship\u2026\u201d This means sureties on payment and performance bonds and even personal guarantees.<\/p>\n\n\n\n<p><strong><em>Notice and Discharge<\/em><\/strong><\/p>\n\n\n\n<p>A surety on a contract may send a written notice requiring the obligee to bring a suit on the contract. If the obligee fails to do so within the \u201cfirst term of court\u201d or fails to do so within the \u201csecond term of court if good cause is shown for delay\u201d then the surety is discharged of liability. \u201cTerm of court\u2019 is antiquated. However, that has since been construed to mean a \u201creasonable time.\u201d<\/p>\n\n\n\n<p><strong><em>The Priority of the Execution<\/em><\/strong><\/p>\n\n\n\n<p>If a judgment is entered against a principal and a surety, then Chapter 43 requires the sheriff to first levy the principal\u2019s property until the judgment is satisfied. If the principal does not have enough property in the county to satisfy the judgment, then the surety\u2019s property may be levied.<\/p>\n\n\n\n<p><strong><em>Subrogation<\/em><\/strong><\/p>\n\n\n\n<p>The surety may also subrogate to the judgment creditor\u2019s rights to extent the surety makes or is complelled to make payment(s) to satisfy the judgment.<\/p>\n\n\n\n<p><strong><em>Waiver<\/em><\/strong><\/p>\n\n\n\n<p>These rights may be waived by agreement. For this reason, these rights are often, directly or indirectly, waived.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Joe Virene | Gray Reed &amp; McGraw Texas surety law contains obscure procedural rules that can have outsized consequences. Chapter 43 of the Civil Practice and Remedies Code is an important example. Applicability This chapter applies to everything that is a \u201csurety\u201d as defined by the statute. The statute\u2019s definition includes \u201can endorser, a guarantor,&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/obscure-important-surety-guarantee-rules\/\">Continue reading <span class=\"screen-reader-text\">Obscure But Important Surety and Guarantee Rules<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[172],"tags":[9895,11089,11088,155],"class_list":["post-897098","post","type-post","status-publish","format-standard","hentry","category-construction-law-2","tag-advise-consult","tag-civil-practice","tag-surety-law","tag-texas","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Obscure But Important Surety and Guarantee Rules - Advise &amp; 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