Promissory Note With Personal Guarantee for United Arab Emirates

Promissory Note With Personal Guarantee Template for United Arab Emirates

A legally binding financial instrument under UAE law that combines a promissory note with a personal guarantee, creating a dual layer of payment security. The document establishes an unconditional promise to pay a specified sum by the maker to the payee, backed by a personal guarantee from a third party who assumes responsibility for the payment if the primary obligor defaults. The document is governed by UAE Federal Law No. 18 of 1993 (Commercial Transactions Law) and must comply with local requirements for both promissory notes and personal guarantees, including proper execution, witnessing, and potential notarization requirements.

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What is a Promissory Note With Personal Guarantee?

The Promissory Note With Personal Guarantee is a crucial financial instrument commonly used in UAE business transactions where enhanced payment security is required. This document combines the features of a standard promissory note with additional security through a personal guarantee, making it particularly valuable in situations where the creditor requires extra assurance of payment. The document is governed by UAE Federal Law No. 18 of 1993 (Commercial Transactions Law) and must meet specific legal requirements for validity and enforceability. It's frequently used in commercial lending, supplier credit arrangements, and other business transactions where credit is extended. The personal guarantee component makes it especially useful when dealing with newly established businesses, companies with limited credit history, or in situations where additional security is preferred over traditional collateral.

What sections should be included in a Promissory Note With Personal Guarantee?

1. Date and Place of Issuance: Specifies the date and location where the promissory note is issued, which is crucial for validity under UAE law

2. Identification of Parties: Clear identification of the maker (promisor), payee, and guarantor including full legal names and addresses

3. Unconditional Promise to Pay: Express statement of the unconditional promise to pay a specific sum, including the amount in both numbers and words

4. Payment Terms: Specified date or timeline for payment, including whether it's on demand or at a fixed/determinable future time

5. Place of Payment: Designation of where the payment should be made

6. Personal Guarantee Declaration: Express statement of personal guarantee, including the guarantor's unconditional commitment to pay

7. Guarantor's Obligations: Detailed scope of the guarantor's liability and conditions of the guarantee

8. Enforcement Provisions: Terms regarding enforcement of the note and guarantee under UAE law

What sections are optional to include in a Promissory Note With Personal Guarantee?

1. Interest Rate: Include when interest is to be charged, ensuring compliance with UAE Sharia principles and applicable laws

2. Multiple Guarantors Clause: Include when there are multiple guarantors, specifying joint and several liability

3. Cross-Default Provisions: Include when the note is part of a larger financing arrangement

4. Currency Provisions: Include when the payment is to be made in a currency other than UAE Dirhams

5. Notice Requirements: Include when specific notice procedures for demand or default are required

6. Assignment Clause: Include when the note needs to be transferable

What schedules should be included in a Promissory Note With Personal Guarantee?

1. Payment Schedule: If payments are to be made in installments, detailing the payment dates and amounts

2. Guarantor's Asset Declaration: Statement of the guarantor's assets that support the guarantee

3. Corporate Authority Documentation: If the maker or guarantor is a corporate entity, including board resolutions and powers of attorney

4. Specimen Signatures: Authenticated signatures of the maker and guarantor(s)

Authors

Alex Denne

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

Publisher

Genie AI

Document Type

Promissory Note

Sector

Banking

Cost

Free to use
Relevant Industries

Banking and Financial Services

Real Estate

Construction

Manufacturing

Trading and Commerce

Small and Medium Enterprises

Retail

Professional Services

Investment

Import/Export

Relevant Teams

Legal

Finance

Treasury

Credit Control

Risk Management

Commercial Operations

Corporate Secretariat

Accounts Receivable

Collections

Executive Management

Relevant Roles

Chief Financial Officer

Finance Director

Credit Manager

Treasury Manager

Financial Controller

Legal Counsel

Commercial Director

Risk Manager

Collections Manager

Accounts Receivable Manager

Business Development Manager

Company Secretary

Managing Director

CEO

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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