Does a creditor have a duty to protect and preserve the security of a guarantor?

68 At common law, a creditor, in the absence of a contrary agreement, is under a duty to protect and preserve the security he holds of the debtor. Upon payment of the debt by a guarantor, a creditor must transfer and assign the security to the guarantor. However, the creditor and the guarantor may make other arrangements. The guarantor is competent to contract himself out of his common law entitlement to the protection of the equitable rule requiring the preservation and eventual transfer of the security to him by the creditor: see Bauer v. Bank of Montreal, 1980 CanLII 12 (SCC), [1980] 2 S.C.R. 102, at p. 106-107.