If the principal debtor defaults, the surety has rights against the principal debtor, third parties, and cosureties. These rights would include:
A) exoneration.
B) reimbursement.
C) subrogation.
D) contribution.
E) All of these.

Question

Quizplus · Accepted Answer

The surety has the following rights in case of default by the principal debtor:
A) Exoneration: The right to be discharged from the obligation of the contract when the principal debtor defaults or dies.
B) Reimbursement: The right to recover from the principal debtor any amount paid to fulfill the obligation.
C) Subrogation: The right to step into the shoes of the creditor after paying the debt, and to pursue the remedies available to the creditor against the principal debtor, such as filing a lawsuit or seizing assets.
D) Contribution: The right to recover from cosureties their fair share of the liability, if the surety has paid more than its proportionate share. 
Thus, all these rights are available to the surety in case of default, hence option E is the correct answer.

If the Principal Debtor Defaults, the Surety Has Rights Against