Short Form Unlimited Guarantee and Indemnity
This Short Form Unlimited 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 Short Form Unlimited 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 does not limit the maximum amount for which the guarantor may be liable.
When should you use Short Form Unlimited Guarantee and Indemnity?
This short form is suitable for smaller loans where unlimited liability is required. The open-ended nature of the guarantor’s liability may be resisted by potential guarantors, and a limited liability guarantee may be more appropriate depending on the parties’ negotiating positions.
Choose the right version
If you need to cap the guarantor’s maximum liability, use:
If you require more detailed risk protection, 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.
Short Form Unlimited Guarantee and Indemnity is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.