Deed Of Release Of Guarantee Template for the United Arab Emirates

A Deed of Release of Guarantee is a formal legal document that terminates a guarantor's obligations under an existing guarantee in the United Arab Emirates. This document provides legal certainty by formally discharging the guarantor from future liability while protecting all parties' interests under UAE commercial law.

When do you need this document?

You need a Deed of Release of Guarantee when the principal debt has been fully repaid and you want to formally release the guarantor from their obligations. This document is also required when restructuring loan agreements where the original guarantee is no longer needed, or when replacing one guarantor with another in commercial transactions. Banks and financial institutions commonly use this deed when borrowers provide alternative security arrangements, making the personal or corporate guarantee unnecessary. Additionally, you may need this document when settling disputes involving guaranteed obligations or when corporate restructuring requires the release of guarantees provided by directors or shareholders.

Key legal considerations

The deed must clearly identify all parties involved, including the beneficiary, guarantor, and principal debtor, along with their legal capacity to enter into the release. You should specify whether the release is partial or complete, and clearly reference the original guarantee document by date, parties, and registration details if applicable. The document must include proper consideration for the release, which may be nominal or represent actual value exchanged. Corporate guarantees require board resolutions and proper authorization from directors, while individual guarantors need verification of identity and legal capacity. The deed should address any outstanding claims or disputes related to the guarantee and specify the effective date of release to avoid future confusion.

Legal requirements in United Arab Emirates

Under UAE Federal Law No. 5 of 1985 (Civil Code), particularly Articles 1092-1123 dealing with guarantees, the deed must be executed with proper formalities to be legally effective. The document typically requires notarization under Federal Law No. 4 of 2013 on Notary Public, especially for high-value guarantees or those involving real estate securities. For commercial guarantees, compliance with UAE Commercial Transactions Law (Federal Law No. 18 of 1993) is essential, particularly regarding the termination of commercial securities. Corporate parties must comply with UAE Commercial Companies Law (Federal Law No. 2 of 2015) for proper authorization and execution. The deed should be drafted in Arabic or include certified Arabic translation for official purposes, and all signatures must be properly witnessed and authenticated according to UAE legal standards.