Legal Definitions - cosuretyship

Cosuretyship

Cosuretyship is a legal term that refers to the relationship between two or more sureties who are jointly responsible for any loss resulting from the principal's default. In other words, cosureties are bound to answer for the same duty of the principal.

For example, let's say that John, Jane, and Jack are cosureties for a loan that their friend, Tom, took out from a bank. If Tom defaults on the loan, the bank can hold John, Jane, and Jack equally responsible for the debt. This means that if Tom cannot pay back the loan, John, Jane, and Jack will have to pay it back instead.

Another example of cosuretyship is when two or more people co-sign a lease for an apartment. If one of the co-signers fails to pay their portion of the rent, the other co-signers are responsible for covering the missing amount.

Cosuretyship is a legal concept that is often used in situations where multiple parties are responsible for the same obligation. The examples provided illustrate how cosureties can be held jointly responsible for a debt or obligation if the principal defaults. This means that cosureties must trust each other and have confidence in the principal's ability to fulfill their obligations, as any default can result in financial loss for all parties involved.