Suretyship in Quebec : Rules, effects, and legal limits

Published on September 25, 2025

Suretyship is a legal mechanism that strengthens trust between parties by securing the fulfillment of an obligation. It allows creditors to obtain additional security, but it exposes the surety to significant financial risks. Thus, before committing, it is essential to fully understand the scope of suretyship, its conditions of validity, and the possible remedies.

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Suretyship is a common legal notion, but often misunderstood. Whether to guarantee a loan, a contractual obligation, or in certain commercial transactions, suretyship can have major consequences, both for the surety (the person who commits to guarantee the debt) and for the creditor and debtor.

In this article, we review the essential rules set out in the Civil Code of Quebec.

What is suretyship?

According to section 2333 C.C.Q., suretyship is the contract by which a person, called the surety, undertakes to a creditor to perform the obligation of a debtor if the latter defaults. This commitment may be gratuitous or compensated.

It is important to note that suretyship is not presumed: it must be expressly consented to (s. 2335 C.C.Q.). In other words, one cannot be considered a surety implicitly.

Furthermore, a person may act as surety even without the consent or knowledge of the principal debtor (s. 2336 C.C.Q.). It is also possible to guarantee not only the debtor, but also another surety.

Conditions and limits of suretyship

The Civil Code provides certain strict conditions to ensure the validity and scope of suretyship :

  • The debtor required to provide a surety must present one who has sufficient property in Quebec and whose domicile is in Canada (s. 2337 C.C.Q.);
  • Suretyship cannot be extended beyond the limits expressly provided in the contract (s. 2343 C.C.Q.);
  • The surety is liable to pay only if the debtor fails to perform their obligation (s. 2346 C.C.Q.).
These rules therefore aim to protect the surety against disproportionate or imprecise commitments.

Effects of suretyship

Once entered into, suretyship entails several legal effects :

  • The surety is not discharged if the creditor merely grants the debtor an extension of time (s. 2354 C.C.Q.);
  • In the event of payment, the surety has a recourse against the debtor to recover the sums paid, including principal, interest, and damages (s. 2356 C.C.Q.). However, if they paid without notifying the debtor, this recourse may be limited (s. 2358 C.C.Q.);
  • When there are several sureties, the one who paid the debt may turn against the others for their respective shares (s. 2360 C.C.Q.).
Finally, the death of the surety terminates the suretyship. However, they remain liable for debts already existing at that time (ss. 2361 and 2364 C.C.Q.).

Release of the surety

Certain circumstances allow the surety to be released :

  • When the creditor accepts property in payment of the debt, the surety is automatically discharged, even if the creditor later loses this property (s. 2366 C.C.Q.);
  • Suretyship ends with the death of the surety, but only for future debts.
These provisions aim to prevent the surety from being indefinitely held liable beyond what they initially agreed to.

Conclusion

Suretyship is an essential legal tool that helps secure certain transactions. However, it also carries significant risks for the person who undertakes it as surety. That is why the law strictly regulates its scope, effects, and limits.

Before signing a suretyship contract, or if you wish to contest payment claimed from you as surety, it is strongly recommended to consult a lawyer. For any questions regarding suretyship or to obtain tailored legal support, contact our firm. This will ensure that you fully understand your rights and obligations and that your interests are protected.

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