SIGN HERE, PAY LATER: WHAT EVERY SURETY SHOULD KNOW
Introduction
It is usually one page. It arrives tucked into a credit application, a lease or a supplier account. Someone says "it's just standard", and you sign.
That page may be a deed of suretyship. With one signature, you have promised to pay another person's or company's debt out of your own pocket if they do not. Your house, your savings and your car can all be on the line for a debt you never personally incurred.
Suretyships are among the most common documents in South African business, and among the least understood. This article explains what you are actually signing, where the fine print bites, and what to check before your pen touches the page.
The basics
A suretyship is an accessory obligation: the surety undertakes to the creditor to perform the principal debtor's obligation if the debtor does not. For directors and members, it strips away the limited liability the company or close corporation would otherwise provide.
To be valid, its terms must be in writing and signed by or on behalf of the surety (section 6 of the General Law Amendment Act 50 of 1956). Once that bar is cleared, courts will generally hold sureties to what they signed.
The fine print that bites
Most standard-form suretyships contain three clauses that do the heavy lifting. Few signatories notice them.
Surety and co-principal debtor
This allows the creditor to proceed against you directly, without first excusing the debtor. You remain a surety in law, and your liability stays accessory to the principal debt, but in practice you stand beside the debtor.
Renunciation of benefits
Standard forms routinely require sureties to renounce the benefits of excussion, division and cession of actions. Once division is renounced, the creditor may claim the full debt from any one surety, even where several signed.
Continuing and unlimited cover
Many suretyships cover all debts, present and future, with no rand cap. That means you may be liable for credit the company takes on years after you signed, in amounts you never contemplated.
When the lease ends, but the suretyship does not
A recent Western Cape judgment shows how a few loosely drafted words can keep a surety on the hook for years. In Airports Company South Africa Ltd v Abercrombie's Coffee Shops CC t/a Ocean Basket and Others [2025] ZAWCHC 521; 2026 (4) SA 200 (WCC), three individuals had signed surety in 2009 for a restaurant's lease at Cape Town International Airport.
The written lease expired on 30 September 2017. The restaurant carried on trading, and ACSA pleaded a tacit lease on the same terms from 1 October 2017. The court confirmed that a tacit relocation is a new agreement, not a continuation of the old one. When that arrangement was terminated in April 2024, ACSA claimed about R4.49 million in rental and other charges, plus about R118 900 to restore the premises, and sued the sureties.
The sureties argued that their deed covered only the original written lease, which had ended seven years earlier. Their opening clause said exactly that. But another clause described the suretyship as continuing security for "any indebtedness" of the tenant to the landlord, with no words limiting it to the original lease.
Kantor AJ restated the rule in Tsaperas v Boland Bank 1996 (1) SA 719 (A) that a suretyship is construed restrictively in favour of the surety, but only where ordinary interpretation leaves doubt. He accepted that the sureties' argument had considerable force. Even so, the tension between the clauses meant the meaning could not be decided on exception. The exception was dismissed, the matter goes to trial, and the sureties must pay the costs.
The lesson is uncomfortable: a surety who assumed their exposure ended with the lease now faces a multimillion-rand trial over the meaning of two words.
Three myths that cost people money
"I resigned as director, so I'm off the hook."
Not necessarily. A suretyship is a personal contract between you and the creditor. Resigning, or selling your shares, does not end it unless the deed says so or the creditor agrees in writing to release you.
"I can just cancel it."
Some deeds allow a surety to withdraw on written notice. Even then, withdrawal usually protects you only against new debt. You generally remain liable for everything owed up to the date the notice takes effect. Check your deed before relying on this.
"My spouse never agreed, so it doesn't count."
If you are married in community of property, section 15(2)(h) of the Matrimonial Property Act 88 of 1984 generally requires your spouse's written consent before you sign surety. But section 15(6) excludes suretyships signed in the ordinary course of your profession, trade or business, and section 15(9) can protect a creditor who did not know consent was missing. This is not a reliable escape route.
Before you sign: five questions to ask
Is there a cap? Ask for a maximum rand amount. An unlimited suretyship is a blank cheque.
Which debts does it cover? Tie it to a specific agreement or facility, and say so in every clause, not just the first one.
When does it end? Ask for an end date, or for the suretyship to fall away when the underlying agreement terminates or is renewed without your written consent.
Can you get out? Make sure there is a clear right to withdraw on notice, and diarise it if your role in the business changes.
Who else is signing? If co-sureties exist, consider whether you are willing to give up the right to have the debt shared among them.
Creditors will not always agree to changes. But many will negotiate, and you cannot negotiate a document you did not read.
Conclusion
A suretyship is often the shortest document in the pile and the one with the longest reach. It can outlive the lease, the directorship and the business itself.
If you have already signed one, dig it out and read it. If you are about to sign one, ask the five questions above first. Either way, a short consultation with your attorney now costs far less than defending a claim for someone else's debt later.
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