⇒ pro beneficiaries: this clause contains an unlimited guarantee requiring the surety to answer for all the principal debtor`s claims with respect to the secured bonds. This guide introduces the main provisions of a standard agreement for commercial guarantees and provides advice for the development and negotiation of standard clauses. 1. Guarantee. The surety heresken guarantees unconditional, absolute and irrevocable the performance of the debtor`s obligations to the beneficiary under the contract (guaranteed collective obligations). The guarantee that is exposed is payment, not recovery. Comment: Some guarantees provide specific communication to guarantors as soon as the primary index has not paid or executed. Other guarantees provide that the surety must pay or fulfill its obligations if the principal debtor does not do so without the need for further notification. A surety will ask for written information.
The section also specifies that the performance of one of the beneficiary`s rights under the guarantee does not precludes the exercise of other rights, such as duties against security or other security granted by the principal debtor. The term “unconditional and absolute” means that no conditions must be met or that there is no need to appeal against the debtor before the rights become enforceable against the guarantor. The term “irrevocable” means that the guarantee cannot be revoked as long as the underlying trade agreement remains in force. Loan guarantees can help credit institutions (MFIs) obtain loans that are otherwise not available to them. As a general rule, an MFI is intended to facilitate a (third) credit guarantee in order to obtain a bank credit that would not be possible without the guarantee. Thus, the guarantee can help an MFI access commercial financing markets and support the solvency of the IFM in the eyes of potential lenders. A guarantee should also facilitate the future borrowing of the IFM, by increasing the bank`s willingness to re-grant loans to the IFM, perhaps without requiring additional guarantees as long as the IFM meets the terms of the loan agreement. In addition, MFIs that already have access to commercial financing markets can continue to benefit from credit guarantees, as they can use the guarantee as a structuring instrument, allowing the IFM to obtain a loan on more advantageous terms than a typical unsecured loan (for example. B by obtaining a lower interest rate). Comment: Considerations that may begin with the more formal “WHEREAS” but should not begin with the more formal “WHEREAS” define the context of an agreement.
Since an important element of a guarantee is to take into account the commitments made by the surety, the recitals are useful in determining the purpose of the guarantee and the relationship between the debtor under the basic agreement and the guarantee. If the surety is linked to a debtor`s parent company as part of the agreement or in any way, it must indicate it. Editor`s note. A guarantee (sometimes called a “guarantee”) is a legally binding obligation of a party called guarantor to pay or honour the obligations of another company, usually a related company of the surety, if that other entity does not.