Use of Guarantee Agreement
Deeds are the legal documents used to transfer ownership of legal ownership. A deed of guarantee, also known as a general warranty deed, is an act that makes and guarantees specific commitments regarding the owner`s claim to title. The German Civil Code requires that the guarantor`s undertaking be verified in writing if he has not fulfilled the principal obligation. [34] The Portuguese Code provides for a guarantee that can be proved by all the methods established by law to prove the main contract[35]. According to most civil codes, a guarantee, like any other contract, can usually be provided orally in the presence of witnesses and, in some cases (when it comes to substantial sums of money, for example) under private signature [jargon] or by a judicial or notarial act. [36] In addition, the French and Belgian codes provide that the guarantee cannot be presumed but must always be expressed[37]. In England, the common law requirements of a guarantee are the same as for any other contract. The mutual consent of two or more parties, the competence to the contract and the valuable consideration. [38] [39] An offer of warranty must be accepted by express or implied acceptance. In addition to the types of terms found in almost all contracts, there are provisions that are unique to loan guarantee agreements, such as: In some guarantees, the consideration is “complete.” For example, in exchange for the granting of a lease, the guarantor becomes responsible for the execution of the contracts of the lease. In other cases, it is “piecemeal” or is delivered from time to time for the goods delivered, e.B. when a guarantee is provided to secure the balance of a deposit account with a bank.[41] If the consideration is “complete”, the guarantee runs for the duration of the rental agreement and is irrevocable.
If the consideration is “fragmentary”, the guarantor may, unless otherwise provided in the guarantee, terminate its liability under the guarantee at any time. It is not necessary for the memorandum to be at the same time as the agreement itself. [24] In England, however, before the creditor has made a claim for payment to the guarantor, the creditor may, as soon as the principal debtor is in default, force the creditor to sue the principal debtor if it is solvent and solvent by awarding compensation for costs and expenses. [57] and a similar remedy is also available to the warranty in America. [58] Neither in these countries nor in Scotland, either of the more guarantors, if sued by the creditor for the entire secured debt, can compel the creditor to distribute its claim among the guarantors and reduce it to the share and share of each guarantor. However, this beneficium divisionis, as it is called in Roman law, is recognized by many existing codes. [59] In this particular case, a limited guarantee is a type of guarantee in which the guarantor is only required to repay a certain amount of the loan for the debtor. In these circumstances, the amount must be clearly indicated in the guarantee document. A promise to give a guarantee is included in the law, but not one, to obtain a guarantee. The general principles governing the safeguards provided for in the Fraud Act are as follows: (1) The primary liability of a third party must exist or be taken into account; [19] (2) The promise must be made to the creditor; (3) There is no liability on the part of the guarantor, regardless of an express promise of guarantee; (4) The principal purpose of the guarantor parties shall be the performance of the obligation of a third party; [20] and (5) The contract concluded cannot constitute a sale of the security of a debt or of the creditor`s claim itself to the creditor[21]. If the guarantor`s liability is less extensive than that of the principal debtor, the question arises in England and America as to whether the guarantor is liable only for part of the debt that corresponds to the limit of his liability. or, up to such a limit, for the entire debt.
[48] The guarantor can only be held liable for damages caused by the guaranteed delay. In addition, in the case of a joint and several guarantee by means of joint and several guarantees, unless they all sign it, no one is liable under this guarantee. [49] The guarantor`s limitation of liability must be interpreted as giving effect to what can reasonably be assumed to be the intention of the parties expressed in writing. In the event of a suspicious importation, the use of proof of payment is permitted in order to explain, but not contradict, the written proof of the guarantee. Most bonds are covered against default by a financial guarantee company (also known as a single-line insurer). The global financial crisis of 2008-2009 hit financial guarantee companies particularly hard. It left many financial guarantors with billions of dollars of bonds that had to be repaid on defaulting mortgage securities, and this led to a decline in the solvency of financial guarantee companies. There are no fixed rules of interpretation that determine whether a guarantee is continuous or not, but each case must be judged on its individual merits. In order to obtain a correct design, it is often necessary to examine the circumstances that accompany it, which often show what was the object that the parties took into account when accepting the guarantee and what was the scope and purpose of the transaction between them. Most long-term guarantees are either ordinary company guarantees for advances made or goods delivered to the principal debtor, or obligations for the good conduct of persons in public or private offices or in employment. .