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Guarantor Agreement For Loan Template for Switzerland

A Swiss law-governed Guarantor Agreement for Loan is a legally binding document where a guarantor commits to securing the obligations of a borrower under a loan agreement. Governed by Articles 492-512 of the Swiss Code of Obligations, this agreement must be in writing and specify the maximum amount of the guarantor's liability. The document establishes the conditions under which the guarantor must fulfill the borrower's obligations if they default, including payment terms, enforcement procedures, and the scope of the guarantee. It includes mandatory formal requirements specific to Swiss law and provides essential protections for all parties involved.

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What is a Guarantor Agreement For Loan?

The Guarantor Agreement For Loan is essential in Swiss lending transactions where additional security is required for a loan facility. This document is commonly used when a lender requires extra assurance beyond the borrower's own creditworthiness, typically in situations involving corporate groups, family businesses, or significant commercial loans. Under Swiss law, particularly the Swiss Code of Obligations (Articles 492-512), such guarantees must meet strict formal requirements, including written form and maximum liability specification. The agreement outlines the guarantor's obligations, enforcement mechanisms, and protective provisions for all parties. It's particularly relevant in scenarios where parent companies guarantee subsidiaries' loans, shareholders support their companies' borrowing, or individuals secure business loans for family members or related entities.

What sections should be included in a Guarantor Agreement For Loan?

1. Parties: Identification of the Guarantor, Principal Debtor (borrower), and Beneficiary (lender)

2. Background: Context of the underlying loan agreement and the purpose of this guarantee

3. Definitions: Definitions of key terms used throughout the agreement

4. Guarantee: Core section specifying the guarantee's scope, maximum amount, and nature (joint and several or simple guarantee)

5. Guarantor's Representations and Warranties: Guarantor's confirmations regarding legal capacity, understanding of obligations, and financial condition

6. Duration and Extent of Liability: Term of the guarantee and specific limitations on the guarantor's liability

7. Payment Obligations: Details of when and how the guarantor must make payments upon default

8. Enforcement: Procedures and conditions for enforcing the guarantee

9. Costs and Expenses: Allocation of costs related to the guarantee and its enforcement

10. Notices: Communication requirements and contact details

11. Governing Law and Jurisdiction: Confirmation of Swiss law governance and jurisdiction for disputes

What sections are optional to include in a Guarantor Agreement For Loan?

1. Security: Include when the guarantor provides additional security for their obligations

2. Multiple Guarantors: Include when there is more than one guarantor, defining their relationship and obligations

3. Independent Advice: Include when the guarantor is an individual, confirming they received independent legal advice

4. Tax Provisions: Include when tax implications need specific addressing, particularly for cross-border situations

5. Currency Provisions: Include when the guaranteed loan is in a different currency from CHF

6. Assignment and Transfer: Include when transfer rights need to be specifically addressed

What schedules should be included in a Guarantor Agreement For Loan?

1. Schedule 1 - Underlying Loan Agreement: Copy or key terms of the loan agreement being guaranteed

2. Schedule 2 - Form of Demand: Template for making a demand under the guarantee

3. Schedule 3 - Guarantor's Asset Statement: Declaration of the guarantor's financial position

4. Appendix A - Power of Attorney: If applicable, authorization documentation for signing

5. Appendix B - Corporate Approvals: If applicable, corporate resolutions or approvals for the guarantee

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Switzerland

Publisher

Ƶ

Document Type

Finance Agreement

Cost

Free to use

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