GA Code § 10-7-21 (2021)
2021 Georgia Code|Title 10 - Commerce and Trade|Chapter 7 - Suretyship|Article 2 - Relative Rights of Creditor and Surety|§ 10-7-21. "Novation" Defined; Effect on Surety's Liability

 Any change in the nature or terms of a contract is called a "novation"; such novation, without the consent of the surety, discharges him.   (Orig. Code 1863, § 2130; Code 1868, § 2125; Code 1873, § 2153; Code 1882, § 2153; Civil Code 1895, § 2971; Civil Code 1910, § 3543; Code 1933, § 103-202.)   Editor's notes.   - It was held in some cases, prior to 1981, that this section did not apply to compensated sureties, as they were treated as guarantors under O.C.G.A. § 10-7-1 as it then read. See, for example, Travelers Indem. Co. v. Sasser & Co., 138 Ga. App. 361, 226 S.E.2d 121 (1976); Brock Constr. Co. v. Houston Gen. Ins. Co., 144 Ga. App. 860, 243 S.E.2d 83, aff'd, 241 Ga. 460, 246 S.E.2d 316 (1978), overruling Little Rock Furn. Co. v. Jones & Co., 13 Ga. App. 502, 79 S.E. 375 (1913), and Fairmont Creamery Co. v. Collier, 21 Ga. App. 87, 94 S.E. 56 (1917). Other cases stated that this section did apply to contracts of guaranty. See, for example, Dunlap v. Citizens & S. DeKalb Bank, 134 Ga. App. 893, 216 S.E.2d 651 (1975); Gilbert v. Cobb Exch. Bank, 140 Ga. App. 514, 231 S.E.2d 508 (1976); Ricks v. United States, 434 F. Supp. 1262 (S.D. Ga. 1976). Then in 1981, Ga. L. 1981, p. 870, § 1, amended O.C.G.A. § 10-7-1 to abolish the distinction between contracts of suretyship and guaranty. See the Editor's note to O.C.G.A. § 10-7-1.   Law reviews.   - For article, "Georgia Law Needs Clarification: Does it Take Willful or Wanton Misconduct to Defeat a Contractual 'Exculpatory' Clause, or Will Gross Negligence Suffice," see 19 Ga. St. B. J. 10 (Feb. 2014)   JUDICIAL DECISIONS   ANALYSIS    General Consideration   Novation   Consent   Application   Extension    RESEARCH REFERENCES   Am. Jur. 2d.   - 74 Am. Jur. 2d, Suretyship, § 33 et seq.   C.J.S.   - 72 C.J.S., Principal and Surety, § 95 et seq.   ALR.    - Consenting to continuance or extension of time in action as releasing surety, 7 A.L.R. 376.    Extension of time or other modification of original contract as releasing indemnitor of surety or guarantor, 43 A.L.R. 1368.    Liability of surety or guarantor for partnership in respect of transactions or defaults subsequent to change in personnel of the partnership, 45 A.L.R. 1426.    Discharge of accommodation maker or surety by extension of time or release of collateral, under Negotiable Instruments Law, 48 A.L.R. 715; 65 A.L.R. 1425; 108 A.L.R. 1088; 2 A.L.R.2d 260.    Taking of demand note in renewal as releasing surety or endorser, 48 A.L.R. 1222.    Acceptance of interest in advance as consideration for, or evidence of, an extension of time which will release a guarantor, surety, or endorser, 59 A.L.R. 988.    Liability of grantee assuming mortgage debt to grantor, 76 A.L.R. 1191; 97 A.L.R. 1076.    Liability of guarantor of or surety for bank deposit as affected by reorganization, merger, or consolidation of bank, 78 A.L.R. 381.    Creditor's knowledge of, or consent to, assumption by third person of debtor's obligation as release of original debtor or extinguishment of original debt essential to novation, 87 A.L.R. 281.    Guaranty of commercial credit of dealer as affected by latter's change of location or field of operation, 89 A.L.R. 651.    Lessee as surety for rent after assignment, and effect of lessor's dealings (other than consent to assignment or mere acceptance of rent from assignee) to release lessee, 99 A.L.R. 1238.    Effect of silence of surety or endorser after knowledge or notice of facts relied upon as releasing him, 101 A.L.R. 1310.    Rule as to discharge of surety by subsequent modification of obligation without his consent as applicable to surety on bond for discharge of lien, 102 A.L.R. 764.    Failure of accommodation maker or endorser to disaffirm transaction, or his continued recognition of note after learning of its use for purpose other than intended, as ratification of, or estoppel to assert, the diversion, 105 A.L.R. 437.    Construction and application of provision of guaranty or surety contract against release or discharge of guarantor by extension of time or alteration of contract, 117 A.L.R. 964.    Remission or waiver of part of principal's obligation as releasing surety or guarantor, 121 A.L.R. 1014.    Necessity of proof of original obligor's consent to, or ratification of, third person's assumption of obligation, in order to effect a novation, 124 A.L.R. 1498.    Payments or advancements to building contractor by obligee as affecting rights as between obligee and surety on contractor's bond, 127 A.L.R. 10.    Creditor's reservation of rights against surety in releasing or extending time to principal debtor, 139 A.L.R. 85.    Surety's liability as affected by the addition, without surety's knowledge or consent, of the personal obligation of a third person, 144 A.L.R. 1266.   Creditor's acceptance of obligation of third person as constituting novation, 61 A.L.R.2d 755.   Guarantor of nonnegotiable obligation as released by creditor's acceptance of debtor's note or other paper payable at an extended date, 74 A.L.R.2d 734.   Liability of lessee's guarantor or surety beyond the original period fixed by lease, 10 A.L.R.3d 582.   Change in name, location, composition, or structure of obligor commercial enterprise subsequent to execution of guaranty or surety agreement as affecting liability of guarantor or surety to the obligee, 69 A.L.R.3d 567.