Agreement of Guarantee

The principal right of the guarantor against the creditor entitles him, after payment of the secured debt, to all the securities held by the creditor against the principal debtor. If the creditor has lost or indebted these securities by default or has otherwise made them unavailable, the guarantee shall be paid to the pro tanto. Some examples are a large company (the creditor) that borrows a large sum of money in the market backed by a guarantee from a large insurance company (guarantor). Another example could be a shipping company (the creditor) looking for a guarantee of the value of a particular shipment secured by a guarantee from a marine insurance company (guarantor). Finally, there are personal financial guarantees where Uncle Jim (guarantor) agrees to support a loan to his nephew Bob (the debtor). Uncle Jim may have to give a pledge to the ultimate lender, the bank, e.B. a pledge on a certain amount of assets to cover the loan to nephew Jim. If you and a friend or relative plan to lend and borrow money, these 10 provisions should be included in your loan agreement. Whichever party is filling out this document, this must be done carefully to ensure that the true terms of the agreement between the parties have been seized. When everything is submitted, it must be printed and signed by the guarantor. Then, a copy must also be made for the debtor and the creditor. In England, however, before making a claim for payment to the guarantor, the creditor may, as soon as the principal debtor is in default, force the creditor to sue the principal debtor if he is solvent and solvent. [57] and a similar means is also open to the guarantor in America.

[58] Neither in any of these countries nor in Scotland, can any of the guarantees, if sued by the creditor for the entire secured debt, require the creditor to allocate its claim among the guarantees and to reduce them to the proportion and share of each guarantee. However, this beneficium divisionis, as it is called in Roman law, is recognized by many existing codes. [59] The Fraud Act does not invalidate an oral warranty, but renders it unenforceable. It may therefore be available to support a defense against a lawsuit, and the money paid under it cannot be recovered. Compensation is not a guarantee within the meaning of the law, unless it takes into account the primary liability of a third party. It is therefore not necessary to be in writing if it is only a promise to become responsible for a debt, if the person to whom the promise is made were to become responsible. [18] A guarantor is entitled to a contribution from a co-insurance under his joint liability. This particular right does not derive from a contract, but derives from own funds based on equal burden and advantage and exists irrespective of whether the guarantees are joint and several or several and whether they are bound by the same or different instruments.

However, there is no right to contribute if each guarantor is individually bound to only a certain part of the secured debt; not even in the case of a warranty for a warranty; [71] and also not if a person becomes a guarantor with another person and at his request. The contribution may be collected either before payment or as soon as the guarantor has paid more than his share of the common debt; [72] and recoverable amount is now still governed by the number of solvent collateral, although this rule previously prevailed only in equity. In the event of bankruptcy of a guarantor, proof of his assets may be provided by a co-guarantor for any excess of his share. Capital duty is not the only right that co-authors have against each other, but they are also entitled to all guarantees taken by one of them as compensation for the liability incurred by the principal debtor. A warranty contract is a contract that describes your role in the process. It supports a borrower`s obligation to a lender; In the main contract, the borrower agrees to provide the lender with something of value, such as money or goods and services. By completing a personal guarantee form, you, the “guarantor”, agree to keep the borrower`s promise if he does not fulfill his obligation. A guarantee agreement can be used to ensure the repayment of a loan, the repayment of an additional loan for an already delinquent loan, payments due under a lease, or the payment of future balances of purchases by credit card. In a collateral arrangement, the collateral can be “absolute” (you assume the obligation if the borrower is unable to do so for any reason) or “conditional” (your liability as a “guarantor” depends on a specific event in addition to the borrower`s default) and can be limited to a specific transaction or amount or cover obligations indefinitely. Other names for this document: Warranty Contract Form, Personal Warranty Agreement The usual way in England to assert liability under a warranty is to bring an action in the High Court or County Court. The creditor is also entitled to obtain compensation by set-off or counterclaim in an action brought against him by the surety.

On the other hand, the guarantor can now resort to any set-off that may exist between the principal debtor and the creditor in any court before which the action for security is pending. In addition, if one of the guarantors is sued for the same debt, the creditor or his guarantee may, by means of a claim against the third party, require his co-guarantors to contribute to joint and several liability. Independent proof of the guarantor`s liability under his guarantee must always be provided during the negotiation. The creditor may not rely on a confession, judgment or arbitral award against the principal debtor. [60] [61] Guarantee agreements are often quite simple and should contain only the basic information between the parties: their identity, contact details, secured debts and additional terms for those debts. The guarantor always assumes a risk, in fact the entire risk, because if the child does not make the agreed payments, the responsibility for repaying the loan lies with the parent. .

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