Consideration in Suretyship Contracts in Washington

The suretyship relation is a specialized form of contract and in order to be enforceable must satisfy all the requirements of contract formation, one of which is consideration. If this were always kept in mind and the cases analysed on the basis of technical contract rules, much of the difficulties and confusion found in the area would disappear. However, because of the tripartite nature of the suretyship transaction and of the circumstance that, at least historically, the surety generally did not derive any direct economic benefit from the transaction, lending his name and credit for reasons of blood ties or friendship, the basic nature of the transaction was often lost sight of by courts. This is most noticeable in the consideration area.

Since people usually bargain for economic goods or services, which is almost invariably true of the principal contract in the suretyship situation, many cases tend to equate direct economic benefit with the technical concept of consideration.