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A Guarantee Agreement is a legally binding promise where one party (the guarantor) commits to covering another party's financial obligations if they fail to pay. In Denmark, these agreements frequently secure business loans, rental contracts, and commercial transactions under the Danish Contracts Act (Aftaleloven).

Danish law requires guarantee agreements to clearly specify the maximum liability amount and duration of the guarantee. The agreement protects lenders and creditors while giving borrowers access to financing they might not otherwise obtain. Banks and financial institutions often use standardized guarantee forms approved by the Danish Financial Supervisory Authority (Finanstilsynet).

Use a Guarantee Agreement when you need to secure financial commitments in Danish business transactions. This legal tool proves especially valuable for landlords seeking rent protection, banks extending business loans, or suppliers offering credit terms to new customers.

The agreement becomes crucial when dealing with startup companies, contractors with limited credit history, or significant financial commitments under Danish law. Having this guarantee in place protects creditors from default risks while helping businesses build trust with partners. Many Danish banks require guarantees for commercial loans exceeding 1 million kroner, particularly for new business relationships.

• Personal Guarantee Form: Used when an individual backs a business obligation, common for small business loans in Denmark
• Parent Guarantee Agreement: When a parent company guarantees its subsidiary's financial commitments to suppliers or lenders
• Authorised Guarantee Agreement: Specifically for commercial lease assignments, where outgoing tenants guarantee new tenant obligations
• Personal Guarantee Promissory Note: Combines payment promise with personal guarantee, often used in private lending

• Banks and Financial Institutions: Primary users of Guarantee Agreements, requiring them as security for business loans and credit facilities
• Corporate Directors: Often sign as authorized representatives when their company provides guarantees for subsidiaries or business partners
• Small Business Owners: Frequently required to provide personal guarantees to secure company obligations under Danish commercial law
• Legal Counsel: Draft and review agreements to ensure compliance with Danish financial regulations and contract law
• Commercial Landlords: Request guarantees from business tenants or their parent companies to secure lease obligations

• Party Details: Gather full legal names, addresses, and registration numbers for both guarantor and beneficiary
• Obligation Scope: Define exact financial commitments being guaranteed, including maximum liability amounts
• Duration Terms: Specify guarantee period and any triggering events for termination under Danish law
• Supporting Documents: Collect proof of authority to sign, company registration papers, and financial statements
• Verification Steps: Confirm signing authority and use our platform to generate a legally compliant Danish Guarantee Agreement that includes all mandatory elements
• Internal Review: Check alignment with company policies and risk tolerance before finalizing

• Identification Section: Full legal names, addresses, and registration numbers of all parties involved
• Guarantee Scope: Clear description of guaranteed obligations and maximum liability amount under Danish law
• Duration Clause: Specific start date and termination conditions of the guarantee commitment
• Payment Terms: Detailed process for demanding payment and timeframes for guarantor response
• Default Provisions: Circumstances triggering guarantee enforcement and consequences
• Governing Law: Explicit reference to Danish law and jurisdiction for dispute resolution
• Signatures Block: Space for authorized representatives with their titles and company stamps

A Guarantee Agreement differs significantly from a Bank Guarantee in several key aspects under Danish law. While both provide financial security, their structure and application vary considerably.

• Legal Nature: A Guarantee Agreement is a contract between three parties (creditor, debtor, and guarantor), while a Bank Guarantee is a direct promise from a bank to pay a beneficiary
• Payment Trigger: Bank Guarantees typically require immediate payment upon demand, whereas Guarantee Agreements often allow the guarantor to dispute or negotiate payment terms
• Cost Structure: Bank Guarantees involve upfront fees and annual charges from the issuing bank, while Guarantee Agreements usually don't carry direct costs but may require collateral
• Documentation: Bank Guarantees use standardized banking formats, but Guarantee Agreements can be more flexible in their terms and conditions under Danish contract law