Section 691

English translation

Where the creditor makes an agreement with the debtor which has the effect of reducing the guaranteed obligation, including interest, compensation or any accessory charge, the creditor must notify the surety of that agreement in writing within sixty days from the date of the agreement.

The surety is released from the suretyship where the debtor performs the obligation as reduced; or where the debtor performs it only in part but the surety performs the balance; or where the debtor does not perform it but the surety performs the obligation as reduced.

For that purpose the surety may perform even after the time fixed for performance of the reduced obligation has passed, provided it is not more than sixty days after that time. Where the creditor gives the written notice after that time has passed, the surety may perform within sixty days from the date of the creditor's notice.

Where an agreement is made after the debtor is already in default and it extends the time for performance, that extension is not treated as an extension of time under Section 700.

Any agreement whose effect is to impose on the surety a burden greater than paragraph one provides is void.

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