If you’re considering entering into a financial agreement with a company or individual, it’s important to have a financial guarantee agreement in place. This is a legal document that outlines the terms and conditions of the agreement, including the obligations of the parties involved.
To help you get started with drafting your own financial guarantee agreement, we’ve put together a sample that you can use as a template.
Financial Guarantee Agreement Sample:
This Financial Guarantee Agreement (“Agreement”), made on [DATE] between [PARTY A], a [LEGAL ENTITY/INDIVIDUAL] with its principal place of business at [ADDRESS] (“Guarantor”) and [PARTY B], a [LEGAL ENTITY/INDIVIDUAL] with its principal place of business at [ADDRESS] (“Obligee”).
WHEREAS, Obligee has entered into a contract with [COMPANY/INDIVIDUAL] (“Principal”) whereby Principal has agreed to perform certain obligations (the “Obligations”) as set forth in the contract, a copy of which is attached hereto as Exhibit A (the “Contract”), and
WHEREAS, Guarantor desires to provide financial security to Obligee in order to induce Obligee to enter into the Contract with Principal, and
WHEREAS, Guarantor acknowledges that it will benefit directly or indirectly from the performance of the Obligations by Principal.
NOW THEREFORE, in consideration of the premises and mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor and Obligee agree as follows:
1. Guarantor guarantees the full and prompt payment and performance of all Obligations of Principal to Obligee under the Contract as well as any and all other obligations of Principal to Obligee arising from the Contract (collectively, the “Guaranteed Obligations”).
2. In the event that Principal fails to fulfill any of its Guaranteed Obligations under the Contract, Guarantor shall immediately cure such default or perform such Guaranteed Obligations in full. Guarantor waives any right to require Obligee to proceed against Principal or to pursue any other remedy or collateral before seeking payment from Guarantor.
3. This guarantee is an irrevocable and unconditional obligation of Guarantor and shall remain in full force and effect until all Guaranteed Obligations have been satisfied in full.
4. If for any reason any payment made by Principal to Obligee under the Contract is subsequently rescinded, reversed or otherwise invalidated, Guarantor shall immediately become liable for the amount of such payment and shall pay Obligee such amount on demand.
5. Guarantor waives any and all rights it may have against Obligee by reason of Guarantor’s performance hereunder, including any rights of subrogation, reimbursement, contribution or indemnification.
6. This Agreement shall be binding upon and inure to the benefit of Guarantor and Obligee and their respective successors and assigns.
7. This Agreement shall be governed by and construed in accordance with the laws of the State of [STATE] without regard to its conflict of laws principles.
IN WITNESS WHEREOF, Guarantor has executed this Financial Guarantee Agreement as of the date first written above.
[GUARANTOR]By _________________________________
[PRINTED NAME] [POSITION] [OBLIGEE]By _________________________________
[PRINTED NAME] [POSITION]By signing this Financial Guarantee Agreement, both parties acknowledge and agree to the terms outlined in the contract. A financial guarantee agreement is a necessary document that provides financial security and accountability. It’s important to ensure that all parties involved understand and agree to the terms before entering into a financial agreement.