Miscellaneous Letter: Unlimited Guaranty

Form Unlimited Guarantee Contract is a legally binding document that allows for one party to agree to assume liability for the obligations of another under a separate agreement. For example, the creditor/lender in a Loan Agreement may require the debtor/borrower to provide a guarantor before financing the loan. Also, it is common for banks to provide a Bank Guarantee Letter in transactions between businesses. If a Guarantee Agreement is in place, the creditor can request the guarantor to repay the loan in the event that the debtor defaults its obligations under the Loan Agreement.

Guaranty is A contractual obligation to pay a debt, to perform a service, or to otherwise compensate for an obligation that another (the primary debtor) is commited to with a third-party (i.e. a lender), in the event that the primary debtor defaults.

Unlimited Guaranty letter format sample

Unlimited Guaranty For Good And Valuable Consider, and as an inducement for _ (Company), to extend credit to _ (Borrower), the undersigned jointly and severally and unconditionally guaranty to Company the prompt and full payment of all sums now or hereinafter due Company from Borrower. And the undersigned agree to remain fully bound on this guaranty notwithstanding any extension, forbearance, or waiver, or release, discharge or substitution of any collateral or security for the debt. In the event of default, the Company may seek payment directly from the undersigned without need to proceed first against the Borrower. This guaranty shall be binding upon and inure to the benefit of the parties, their successors, assigns and personal representatives. Signed under seal this _ day of _, 20_.

download Miscellaneous Letter: Unlimited Guaranty.doc (ms word format)