Georgia Code
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.
History. 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).

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