Draft Guarantee Agreement

This document is written in the form of an act and, therefore, it is necessary to ensure that the procedures for implementation are properly followed. It is also necessary for the guarantor to provide independent legal advice before signing a personal guarantee in order to avoid any decision to exert undue influence. This is particularly the case where the guarantor is the spouse of a director. Boerge is a party that agrees to pay a debtor`s debts in the event of default. Depending on the type of contract, the surety may deposit a body value (for example. B, land, construction vehicles, etc.) which will be sold and used to pay off debts if the surety does not pay all the debts it guarantees. Note that the borrower or debtor has primary responsibility to the lender in the event of a loan or financing contract, as the liability of the surety arises only in the case of the debtor`s default. This personal guarantee does not limit the maximum amount for which the surety can be held liable. This unlimited liability will likely be rejected by individual guarantors who, if the borrower does not repay, risk their personal assets, including potentially their home. Depending on the relative bargaining power of the parties, it may be necessary to establish a limited liability guarantee. Please note at the bottom right `Court limited warranty form and compensation`.

For example, if a surety has guaranteed the payment of ₦50,000 and the borrower ₦ 100,000 debts and cannot repay that amount, the surety is only required to pay the ₦50,000 ₦ (since the guaranteed amount) and the lender or creditor must sue the borrower for the balance – 50,000 ₦. The extent of bail liability may be limited or unlimited. A guarantor`s liability is unlimited if he guarantees that he will settle all of the borrower`s debts, including principal, interest and late fees, except that the parties agree otherwise. The liability of a surety is limited if the surety agrees to pay only a specified amount in the event of the borrower`s default. A guarantee contract is a contract by which a surety agrees to repay another person`s debts if the person is unable to repay his debts. In other words, the surety assumes responsibility for the debts liability by the debtor in case the debtor does not pay. This document complies with the RGPD (General Data Protection Regulation). If one of the parties is an organization other than a company, an Organization official should sign the document and ensure that a witness confirms the document by writing his name, address, occupation and signature on the line directly under the officer`s signature in the document.