The Mercantile Law Amendment Act

The Mercantile Law Amendment Act, C.C.S.M. c. M120 bilingual version (HTML) Table of Contents Section 1 Guarantee not invalid though consideration does not appear 2 Surety entitled to assignment 3 Right to recover 4 Effect of giving time to a principal debtor 5 Stipulations as to time 6 Part performance of obligation 7 Deceased joint debtors HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows: Guarantee not invalid though consideration does not appear 1 No special promise made by any person to answer for the debt, default, or miscarriage of another person, being in writing, and signed by the party to be charged therewith, or some other person by him thereunto lawfully authorized, shall be deemed invalid to support an action, suit, or other proceeding to charge the person by whom the promise was made, by reason only that the consideration for the promise does not appear in writing, or by necessary inference from the written document. Surety entitled to assignment 2 Every person who, being surety for the debt or duty of another, or being liable with another for any debt or duty, pays the debt or performs the duty, is entitled to have assigned to him, or to a trustee for him, every judgment, specialty, or other security that is held by the creditor in respect of the debt or duty, whether the judgment, specialty, or other security is or is not deemed at law to have been satisfied by the payment of the debt or performance of the duty; and that person is entitled to stand in the place of the creditor, and to use all the remedies, and, if need be, and upon a proper indemnity, to use the name of the creditor, in any action or other proceeding, at law or in equity, in order to obtain from the principal debtor, or any co-surety, co-contractor, or co-debtor, as in the case may be, indemnification for the advances made and loss sustained by the person who has so paid the debt or performed the duty, and the payment or performance so made by the surety is not pleadable in bar of any such action or other proceeding by him. Right to recover 3 No co-surety, co-contractor or co-debtor is entitled to recover from any other co-surety, co-contractor or co-debtor by the means aforesaid, more than the just proportion to which, as between those parties themselves, the last mentioned person is justly liable. Effect of giving time to a principal debtor 4 Giving time to a principal debtor, or dealing with or altering the security held by the principal creditor, does not of itself discharge a surety or guarantor; in such cases a surety or guarantor is entitled to set up the giving of time or dealing with or alteration of the security as a defence, but the defence shall be allowed in so far only as it is shown that the surety has thereby been prejudiced. Stipulations as to time 5 Stipulations in contracts as to time or otherwise which would not, before the passing of The Queen's Bench Act, 1895 , have been deemed to be, or to have become, of the essence of such contracts in a court of equity shall receive in all courts the same construction and effect as they would, prior to the passing of The Queen's Bench Act, 1895 , have received in equity. Part performance of obligation 6(1) Part performance of an obligation either before or after a breach of the obligation extinguishes the obligation (a) when expressly accepted by a creditor in satisfaction; or (b) when rendered pursuant to an agreement for that purpose; though without any new consideration. Unconscionability 6(2) Notwithstanding subsection (1), an obligation is not extinguished by part performance where a court of competent jurisdiction finds that it is unconscionable to so allow. Agreement under clause 6(1)⁠(a) 6(3) Subject to any agreement to the contrary, an acceptance by a creditor under clause 6(1)⁠(a) need not be in writing. Right of revocation 6(4) A creditor may revoke an agreement under clause 6(1)⁠(b) where (a) the debtor has not commenced performance of the agreement; or (b) the debtor has commenced performance of the agreement, but fails to continue performance on a date or within a time provided for in the agreement, and it would be unreasonable in the circumstances for the creditor to give the debtor more time to remedy the default. Transitional 6(5) This section does not affect an obligation arising before the day on which this section comes into force. S.M. 1992, c. 32, s. 10 . Deceased joint debtors 7 Where any one or more joint contractors, obligors, or partners die, the person interested in the contract, obligation or promise entered into by the joint contractors, obligors, or partners may proceed by action against the representatives of the deceased contractor, obligor, or partner in the same manner as if the contract, obligation, or promise had been joint and several, and this notwithstanding there is another person liable under the contract, obligation, or promise still living, and an action pending against that person; but the property and effects of shareholders in chartered banks or members of other incorporated companies is not liable to a greater extent than they would have been if this section had not been passed.