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Continuing Suretyship Agreement

In addition, the lessor would have the right to demand the surrender of the guarantee, even if the surety contract does not provide for the end of the contract if the principal debtor is late after the existence of the guarantee. If the person who signed the contract. B bond is the owner of the company and then sells it to a third party, the guarantee can be held liable for the debts of a company over which it no longer has any influence, unless the surety contracts are terminated and the guarantee is exempt from such agreements. It is important that if you ever sign a guarantee agreement, you must ensure that you fully understand the nature and extent of the debt and how long you can be held responsible. It is also important to ensure that you are exempt from any guarantee agreement that may be signed. They may be able to return to Dieksicherheiten long after they have signed the bonding agreement or after the breakdown of a relationship between the debtor and the principal debtor. · In the case of a continuous guarantee, the responsibility for the guarantee extends to a number of debts and/or transactions. These transactions or debts may relate to future debt or to an existing debt that has already been incurred by the principal debtor. When a guarantee is subject to the breach or delay of the principal debtor, this guarantee is incidental and is therefore considered a guarantee. The guarantee must be an absolute and unconditional promise to be considered a guarantee in the proper sense of the word.

This article deals with a very limited aspect of guarantee agreements: the extent of liability. A classic example is a situation in which a lessor (the creditor) enters into a commercial lease with a rental company (the principal debtor) and the lessor, as part of this lease agreement, insists that the director/owner of the rental company (the surety company) be required to sign a surety agreement under which the guarantee undertakes to comply with the tenant`s obligations if the tenant does not comply with its obligations. In such a scenario, it is obvious that the responsibility for the guarantee depends on the tenant`s failure. As long as there is no delay, the lessor is not entitled to the guarantee. In Firstrand Bank Ltd/Carl Beck Estates (Pty) Ltd, the Tribunal held that the NCA could apply to guarantee agreements and fell within the definition of a « credit guarantee » as defined in Section 8.5) of the NCA. Simply put, a guarantee agreement is an agreement in which a person (the guarantee) commits to another person (the creditor) to fulfill the obligations of another person (the principal debtor). A standard guarantee agreement therefore consists of three separate parts: the creditor, the debtor and the guarantee title. The General Amendment of Law Act, 50 of 1956, stipulates that a valid guarantee agreement must be included in a written document signed by the surety or in the name of the guarantee. In the case of ongoing guarantees, it is important to note that guarantee agreements are not automatically terminated once the debt has been repaid; or whether the company for which the warranty was originally signed has been sold; or if the warranty is dying.