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All Monies Guarantee and Indemnity


This All Monies Guarantee and Indemnity is a legally binding document that allows for one party to assume liability for the obligations of a third party 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.

This Agreement is slightly different to the other guarantees in this portfolio, as the scope of the liability of the Guarantor is much wider. The definition of ‘Guaranteed Obligations’ is drafted widely to cover all monies, debts and liabilities, which the Borrower owes to the Lender, on any account, under present or future banking or credit facilities.

A guarantee will normally be put into place at the request of the Lender before they will lend under a proposed facility arrangement.

Under the agreement, the Lender can request the Guarantor to repay the Guaranteed Obligations in the event that the Borrower defaults on its obligations to the Lender. The repayment by the Guarantor is ‘on demand’, which means that, following a default by the Borrower, there is no waiting period before the Lender can claim against the Guarantor.

This Guarantee Agreement favours the Lender. It incorporates an indemnity, which provides greater protection to the Lender than a straight guarantee. Moreover, this agreement does not limit the maximum amount for which the guarantor may be liable. The Guarantor is liable for the ‘Guaranteed Obligations’ which may increase or decrease over time. This open-ended liability is likely to be resisted by potential guarantors. Depending on the relative negotiating power of the parties, it may be necessary to draw up a guarantee with limited liability. Please see below right ‘Long Form Limited Guarantee Agreement’.

This document contains extensive provisions and is best suited to large transactions. It provides the beneficiary with greater layers of risk protection than the Short Form Unlimited Guarantee and Indemnity.

If you are looking for a document to cover a personal guarantee, please look at the ‘Personal Guarantee’.

This document is drafted as a Deed, and accordingly, care must be taken to ensure that the execution formalities are properly complied with.

All Monies Guarantee and Indemnity is part of Corporate Documents. Just £35.00 + VAT provides unlimited downloads from Corporate Documents for 1 year.

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