Joint and several liability consists of the possibility that a creditor with a plurality of debtors can enforce the entire debt to only one of the debtors.
That is, joint liability allows the lender to collect the entire loan granted to only one of the debtors of the respective group of borrowers.
This joint liability benefits the creditor who can go against the debtor that he deems appropriate to collect his debt. Likewise, the fact that one of the debtors is liable for the entire debt does not exonerate the rest, since the debtor who has paid the debt may demand that the rest of the co-debtors pay him their corresponding part.
The purpose of this responsibility is to protect the debt for the creditor by facilitating its collection.
Requirements of joint and several liability
In order for joint liability to arise, it must be fulfilled with:
- Existence of a link between two parties. It does not have to be a monetary debt, although it is the most common.
- Plurality of debtors. If there is only one debtor, there is no possible solidarity, since only that debtor will have the obligation to respond for the debt.
- It is not necessary that there be a plurality of creditors, but there may be joint and several liability existing both a plurality of creditors and debtors. Any creditor may request from any debtor the full performance of the due provision. If there are a plurality of creditors, and only one of them collects the debt, it must deliver the corresponding part to the co-creditors.
- This solidarity must be expressly agreed. It is not presumed.
Differences with other types of responsibility
It is necessary to differentiate between three types of responsibility: joint, joint and subsidiary.
- Subsidiary liability: There are no several major debtors. There is only one main debtor and a few subsidiary debtors. This means that the contract has established several debtors who will be liable for the debt in the event that the main debtor does not fully comply with his obligation. The creditor has to show that the principal debtor has not fulfilled the obligation.
- Joint liability: There are several debtors and the creditor can only address one debtor, but in that case he can only demand the fulfillment of the debt that corresponds to that debtor only. You may not demand full performance from a single debtor. Each of them is liable only for the debt that has been bound by contract.
To better understand this type of responsibility, we are going to see an example.
A lends $ 100 to B, C, D, E and F to buy machinery for his company and they must repay the amount in a month. Joint and several liability is established in the loan contract.
- Assumption 1: After a month, A (creditor) does not receive the money from its debtors (B, C, D, E and F). Since joint and several liability is established, A goes to B and demands payment of the $ 100. B will be able to go against his fellow debtors C, D, E and F so that each of them pay him $ 20, which is the debt that would correspond to each one.
- Assumption 2: After a month, A (creditor) only receives the money from his debtor B who pays him his corresponding part, $ 20. Since joint and several liability is established, A goes to C or to B himself (who has already paid his part of the debt) and demands the payment of the remaining $ 80. C will be able to go against his fellow debtors D, E and F so that each of them pay him $ 20, which is the debt that would correspond to each one.
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