Limited Guarantee Agreement Template

Limited Guarantee Contract – Long Form

TR.D&C.03.02
This Long Form Limited Guarantee Contract is a legally binding document that allows for one party to agree to assume liability for the obligations of another under a separate agreement. For example, the creditor/lender in a Loan Agreement may require the debtor/borrower to provide a guarantor before financing the loan. Also, it is common for banks to provide a Bank Guarantee Letter in transactions between businesses. If a Guarantee Agreement is in place, the creditor can request the guarantor to repay the loan in the event that the debtor defaults its obligations under the Loan Agreement.

This document can be used by either businesses or individuals, and due to the extensive provisions it contains, this guarantee is well suited to larger transactions as it provides the beneficiary with further layers of risk protection than the short form version. Banks, for example, will generally always demand a long form guarantee due to this.

This agreement is for a limited sum and so contains a provision that sets the maximum amount for which the guarantor may be held liable. If unlimited liability is required then you are advised to download and use the ‘Unlimited Guarantee Contract – Long Form’.

This Long Form Limited Guarantee Contract contains the following clauses:

1. Definitions and Interpretation
2. Guarantee
3. Certification
4. Commencement
5. Continuing Security
6. Incapacity of the Obligor
7. Incapacity of the Guarantor
8. Granting of Time
9. No Competition
10. Company’s Liability
11. Payments to Liquidator
12. Retention of Security in Bankruptcy
13. Discharge and Substitution
14. Set Off against the Company
15. Withholdings
16. Foreign Currency
17. Termination
18. Company’s Waiver
19. Severability
20. Assignment by the Company
21. Notice of Demand
22. Clause Headings
23. Applicable Law and Jurisdiction

If you do not require a guarantee with such detailed risk protection then you are advised to download and use the ‘Limited Guarantee Agreement – Short Form’.

This document is in open format. Either enter the requisite details in the highlighted fields or adjust the wording to suit your purposes.

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