Guarantee Letter

Guarantee Letter Template for Singapore

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Key Requirements PROMPT example:

"I need a Guarantee Letter under Singapore law for our company to guarantee a subsidiary's loan of SGD 2 million from DBS Bank, with the guarantee period running from March 1, 2025 to December 31, 2025."

What is a Guarantee Letter?

A Guarantee Letter is commonly used in Singapore business transactions to provide security and assurance to creditors or contractual counterparties. This document, governed by Singapore law, creates a legally binding commitment from the guarantor to step in if the principal debtor defaults on their obligations. The Guarantee Letter must specify the scope of guaranteed obligations, maximum liability, duration, and enforcement mechanisms. It's particularly important in financial transactions, property leases, and commercial contracts where additional security is required beyond the principal debtor's covenant.

What sections should be included in a Guarantee Letter?

1. Guarantor Details: Full legal name, registration/ID number, and registered address of the guarantor

2. Principal Debtor Details: Full legal name, registration/ID number, and registered address of the principal debtor

3. Creditor Details: Full legal name, registration/ID number, and registered address of the beneficiary of the guarantee

4. Guaranteed Obligations: Clear and specific description of the obligations being guaranteed, including the underlying agreement or debt

5. Guarantee Amount: Maximum amount of the guarantee liability and currency

6. Duration and Validity: Term of the guarantee, effective date, expiry conditions, and any extension provisions

7. Payment Terms: Terms and conditions for payment under the guarantee, including payment period and method

What sections are optional to include in a Guarantee Letter?

1. Demand Requirements: Specific procedures and formalities for making claims under the guarantee, including notice requirements and documentation

2. Counter-Indemnity Provisions: Terms under which the guarantor will be indemnified by the principal debtor

3. Multiple Guarantors Clause: Provisions for joint and several liability when there are multiple guarantors

4. Assignment Restrictions: Provisions restricting or permitting the assignment of rights under the guarantee

5. Governing Law and Jurisdiction: Specification of Singapore law as governing law and jurisdiction for dispute resolution

What schedules should be included in a Guarantee Letter?

1. Form of Demand: Standard template for making claims under the guarantee

2. Principal Agreement: Copy or details of the underlying agreement being guaranteed

3. Corporate Authorizations: Board resolutions and other corporate authorizations where the guarantor is a corporation

4. Specimen Signatures: Authenticated specimen signatures of authorized signatories

Authors

Alex Denne

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

alex.den.21@genieai.co

Relevant legal definitions

Clauses

Relevant Industries

Banking & Finance
Real Estate
Construction
International Trade
Corporate

Relevant Teams

Finance
Legal
Treasury
Risk Management
Compliance
Credit

Relevant Roles

Chief Financial Officer
Finance Director
Treasury Manager
Credit Manager
Legal Counsel
Risk Manager

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