All Monies Guarantee and Indemnity
This All Monies Guarantee and Indemnity is a legally binding document under which the guarantor assumes liability for the obligations of a borrower. The parties to the underlying facility agreements are the lender and the borrower. The parties to the All Monies Guarantee and Indemnity are the guarantor and the lender.
What does All Monies Guarantee and Indemnity do?
It provides a wide-ranging guarantee and indemnity in favour of the lender, covering all monies, debts and liabilities the borrower owes to the lender on any account, under present or future banking or credit facilities (as defined by the “Guaranteed Obligations”).
A guarantee is typically requested by the lender before it will lend under a proposed facility arrangement.
The lender can require the guarantor to repay the Guaranteed Obligations if the borrower defaults, with the guarantor’s liability being “on demand” (so there is no waiting period before the lender can claim once a default has occurred).
When should you use All Monies Guarantee and Indemnity?
Use this version where the lender requires broad, open-ended cover for amounts that may increase or decrease over time. This agreement favours the lender and incorporates an indemnity, which provides greater protection than a straight guarantee.
This agreement does not limit the maximum amount for which the guarantor may be liable. Depending on the parties’ negotiating positions, a limited liability guarantee may be more appropriate.
Choose the right version
If you need to limit the guarantor’s maximum liability, use:
If you need a shorter, unlimited liability option for smaller loans, use:
If you need a personal guarantee, use:
Other statutory note
This document is drafted as a deed, and accordingly care must be taken to ensure that the execution formalities are properly complied with.
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