Can a surety waive the equitable right to discharge a principal contract if the principal contract is materialized?
Canada (Federal), Canada
The following excerpt is from Manulife Bank of Canada v. Conlin, [1996] 3 SCR 415, 1996 CanLII 182 (SCC):
77 However, this right to be discharged as a result of a material variation of the principal contract can be waived by the surety. As McIntyre J. said in Bauer v. Bank of Montreal, 1980 CanLII 12 (SCC), [1980] 2 S.C.R. 102, at p. 107, “it is open to the parties to make their own arrangements, and a surety is competent to contract himself out of the protection of the equitable rule”. The question to be resolved, therefore, is whether clause 34 amounts to a waiver of the respondent’s equitable rights. Before dealing with this question, I believe it would be helpful to discuss briefly some of the interpretive principles relating to guarantees. (a) Interpretive principles relating to guarantees
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