Guaranty
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Last Updated: January 25, 2023.
About this Form
This document is a legal form known as a "guaranty." The person signing the document (the "Guarantor") is guaranteeing to the "Creditor" that the Guarantor will ensure the "Customer" makes prompt, punctual, and full payment of any money that is or will be owed to the Creditor by the Customer. If the Customer fails to make a payment when due, the Creditor may exercise their rights under the guaranty and demand payment from the Guarantor. The Guarantor will be required to pay all sums due to the Creditor, including any unpaid interest or fees and attorney's fees associated with collection attempts.
If there are multiple Guarantors, their obligations will be joint and several, meaning that each will be fully responsible for the debt. Any guarantor can terminate the guaranty with written notice to the Creditor, but only for credit extended after the notice period and not for credit already extended or goods already received.
Common Use Case Scenarios
This form is commonly used when a customer does not have a strong credit history, or the credit line extended is substantial, and the creditor desires additional assurance that the debt will be paid. This form is also appropriate for use when multiple parties are involved in a credit agreement, such as when multiple partners or shareholders own a business.
Top 5 Advantages of This Guaranty Form
1. Protection for the Creditor: The Guaranty form provides a guarantee from the Guarantor that the Customer will make prompt, punctual, and full payment of any money that is owed or will be owed to the Creditor.
2. Primary Obligation: The Guaranty form makes the obligations of the Guarantor primary, meaning that the Creditor can seek payment from the Guarantor before any other party.
3. Avoiding Default Costs: The Guaranty form includes a provision that the Guarantor will be liable for any costs and attorney's fees incurred in the event of default by the Customer.
4. Joint and Several Obligations: If multiple Guarantors sign the guaranty, their obligations become joint and several, meaning that each Guarantor will be fully responsible for the debt.
5. Flexibility: The Guaranty form allows for termination by any guarantor upon written notice to the Creditor, which gives more flexibility for the parties involved.
About this Form
This document is a legal form known as a "guaranty." The person signing the document (the "Guarantor") is guaranteeing to the "Creditor" that the Guarantor will ensure the "Customer" makes prompt, punctual, and full payment of any money that is or will be owed to the Creditor by the Customer. If the Customer fails to make a payment when due, the Creditor may exercise their rights under the guaranty and demand payment from the Guarantor. The Guarantor will be required to pay all sums due to the Creditor, including any unpaid interest or fees and attorney's fees associated with collection attempts.
If there are multiple Guarantors, their obligations will be joint and several, meaning that each will be fully responsible for the debt. Any guarantor can terminate the guaranty with written notice to the Creditor, but only for credit extended after the notice period and not for credit already extended or goods already received.
Common Use Case Scenarios
This form is commonly used when a customer does not have a strong credit history, or the credit line extended is substantial, and the creditor desires additional assurance that the debt will be paid. This form is also appropriate for use when multiple parties are involved in a credit agreement, such as when multiple partners or shareholders own a business.
Top 5 Advantages of This Guaranty Form
1. Protection for the Creditor: The Guaranty form provides a guarantee from the Guarantor that the Customer will make prompt, punctual, and full payment of any money that is owed or will be owed to the Creditor.
2. Primary Obligation: The Guaranty form makes the obligations of the Guarantor primary, meaning that the Creditor can seek payment from the Guarantor before any other party.
3. Avoiding Default Costs: The Guaranty form includes a provision that the Guarantor will be liable for any costs and attorney's fees incurred in the event of default by the Customer.
4. Joint and Several Obligations: If multiple Guarantors sign the guaranty, their obligations become joint and several, meaning that each Guarantor will be fully responsible for the debt.
5. Flexibility: The Guaranty form allows for termination by any guarantor upon written notice to the Creditor, which gives more flexibility for the parties involved.
GUARANTY
FOR GOOD CONSIDERATION, and as an inducement for____________________ (Creditor), to extend credit to ________________________ (Customer), it is hereby agreed that the undersigned does hereby guaranty to Creditor the prompt, punctual and full payment of all monies now or hereinafter due Creditor from Customer.Until termination, this guaranty is unlimited as to amount or duration and shall remain in full force and effect notwithstanding any extension, compromise, adjustment, forbearance, waiver, release or discharge of any party obligor or guarantor, or release in whole or in part of any security granted for said indebtedness or compromise or adjustment thereto, and the undersigned waives all notices thereto.
The obligations of the undersigned shall be at the election of Creditor, shall be primary and not necessarily secondary, and Creditor shall not be required to exhaust its remedies as against Customer prior to enforcing its rights under this guaranty against the undersigned.
The guaranty hereunder shall be unconditional and absolute and the undersigned waive all rights of subrogation and set-off until all sums under this guaranty are fully paid. The undersigned further waives all suretyship defenses or defenses in the nature thereof, generally.
In the event payments due under this guaranty are not punctually paid upon demand, then the undersigned shall pay all reasonable costs and attorney's fees necessary for collection, and enforcement of this guaranty.
If there are two or more guarantors to this guaranty, the obligations shall be joint and several and binding upon and inure to the benefit of the parties, their successors, assigns and personal representatives.
The guaranty may be terminated by any guarantor upon fifteen (15) days written notice of termination, mailed certified mail, return receipt requested to the Creditor. Such termination shall extend only to credit extended beyond said fifteen (15) day period and not to prior extended credit, or goods in transit received by Customer beyond said date, or for special orders placed prior to said date notwithstanding date of delivery. Termination of this guaranty by any guarantor shall not impair the continuing guaranty of any remaining guarantors of said termination.
Each of the undersigned warrants and represents it has full authority to enter into this guaranty.
This guaranty shall be binding upon and inure to the benefit of the parties, their successors, assigns and personal representatives.
This guaranty shall be construed and enforced under the laws of the State of _______________________________.
Signed this_____ day of __________, 20____.
In the presence of:
______________________________ ______________________________
Witness Guarantor
______________________________ ______________________________
Witness Guarantor
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