SECTION 36

The partial or total settlement of a principal debt shall to the same extent lead to the termination of the surety’s commitment. Where there is accord and satisfaction ( datio in solutum) the surety shall unconditionally be discharged even where the creditor thereafter loses possession of the property he had accepted in satisfaction of the debt. Any contrary clause shall be disregarded. The novation of the principal obligation by a change of subject or consideration, the modification of terms and conditions or of the securities attached thereto shall discharge the surety unless he agrees to transfer his security to the new debt. Any contrary clause stipulated before the said novation shall be disregarded. The heirs of the surety shall only be responsible for any debts contracted prior to the death of the said surety.