Suppliers sometimes require customers to provide a third party to guarantee that the customer will pay for goods or services. Clients sometimes require contractors to provide a third party to guarantee that the contractor will carry out its contractual obligations and meet its liabilities. Since suppliers or clients will often not go ahead without such security being put in place, having a suitable guarantee can be crucial.
New Guarantee templates
It is important to ensure that the terms of the guarantee are suitable for the circumstances and in particular that they adequately protect supplier/client as the beneficiary of the guarantee. We have therefore recently reviewed the various template guarantee documents in our Commercial Agreements Group and replaced them with a much wider range of new template guarantees covering a variety of situations and reflecting up to date commercial practice. This new comprehensive range of business documents includes limited and unlimited guarantees, and provides for various different types of guarantor, both those who have and do not have a particular connection or relationship with the entity whose obligations are to be guaranteed.
We have also recently reviewed our forms of Loan Guarantee & Indemnity in the Corporate folder, and have refreshed and improved them to bring them into line with current practice. You can see our Newsletter about them by clicking here.
The contents of this Newsletter are for reference purposes only and do not constitute
legal advice. Independent legal advice should be sought in relation to any specific