Loan Guarantee Agreement Template for Austria

The Loan Guarantee Agreement is a crucial financial instrument in Austrian business practice, commonly used when a third party (guarantor) agrees to secure the loan obligations of a borrower. This document type is essential in various financing scenarios, from corporate lending to real estate transactions, and must comply with Austrian legal requirements, particularly the ABGB and banking regulations. The agreement details the scope of the guarantee, enforcement mechanisms, and parties' rights and obligations. It's particularly important to note that Austrian law distinguishes between abstract guarantees (Garantie) and accessory guarantees (Bürgschaft), which affects the guarantor's obligations and available defenses. The document includes specific provisions required by Austrian law regarding form, content, and execution, and may need additional provisions if the guarantor is a consumer under the Consumer Protection Act (KSchG).

1. Parties: Identification of all parties: Guarantor, Creditor (typically a bank), and reference to the Principal Debtor

2. Background: Context of the guarantee, reference to the principal loan agreement, and the purpose of this guarantee agreement

3. Definitions: Definitions of key terms used throughout the agreement, including 'Guaranteed Obligations', 'Principal Loan Agreement', 'Security', etc.

4. Guarantee: Core section defining the guarantee, its nature (whether abstract or accessory), and scope of the guaranteed obligations

5. Representations and Warranties: Guarantor's confirmations regarding their capacity, authority, and financial condition

6. Payment Mechanics: Procedures and requirements for making payments under the guarantee, including account details and currencies

7. Demand Requirements: Format and process for making demands under the guarantee, including any notice requirements

8. Preservation of Rights: Provisions ensuring the guarantee remains valid despite variations to the underlying loan or other circumstances

9. Tax Gross-Up and Indemnities: Provisions dealing with tax implications and related indemnities

10. Currency Indemnity: Provisions dealing with currency conversion risks and related indemnities

11. Costs and Expenses: Allocation of costs related to preparation, enforcement, and maintenance of the guarantee

12. Duration and Release: Term of the guarantee and conditions for its release or termination

13. Notices: Communication procedures between parties, including address details and acceptable methods

14. Governing Law and Jurisdiction: Confirmation of Austrian law as governing law and jurisdiction of Austrian courts