What is the test for a surety's covenant not to sue?
Prince Edward Island, Canada
The following excerpt is from Reid v. Royal Trust Corp., 1985 CanLII 3079 (PE SCAD):
And in Price v. Barker (1855), 4 E1. & B1. 760, 119 E.R. 281, Coleridge J. for the court, at pp. 779-80, said that: ... a covenant not to sue, qualified by a reserve of the remedies against sureties, is to allow the surety to retain all his remedies over against the principal debtor; and that the covenant not to sue is to operate only so far as the rights of the surety may not be affected.
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