Long Form Limited Guarantee and Indemnity
This Long Form Limited Guarantee and Indemnity is a legally binding document under which the guarantor assumes liability for the borrower’s obligations under a separate loan agreement. The parties to the underlying loan agreement are the lender and the borrower. The parties to the guarantee are the guarantor and the lender.
A guarantee is typically requested by the lender before it will provide finance to the borrower.
What does Long Form Limited Guarantee and Indemnity do?
It allows the lender to require the guarantor to repay the loan 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).
This template incorporates an indemnity, which provides greater protection to the lender than a straight guarantee. It also limits the maximum amount for which the guarantor may be liable.
When should you use Long Form Limited Guarantee and Indemnity?
This version has extensive provisions and is best suited to larger transactions where the lender requires greater layers of risk protection than the short form limited version, but the guarantor’s maximum exposure is capped.
Choose the right version
If unlimited liability is required, use:
If you need a personal guarantee, use:
This document is drafted as a deed, and accordingly care must be taken to ensure that the execution formalities are properly complied with.
Long Form Limited Guarantee and Indemnity is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.