Authorised Guarantee Agreement Template for Switzerland

An Authorised Guarantee Agreement is a legally binding contract under Swiss law where you, as the guarantor, promise to fulfil the financial obligations of another party if they default. This document provides creditors with enhanced security and is essential in many commercial and personal lending situations where additional assurance is required beyond the primary debtor's promise to pay.

When do you need this document?

You'll need an Authorised Guarantee Agreement when a bank or creditor requires additional security before approving a loan or credit facility. This commonly occurs in business financing where a company director guarantees corporate debt, property transactions where family members guarantee mortgage payments, or commercial leases where personal guarantees are required. The agreement is also necessary when refinancing existing debt, securing trade credit from suppliers, or when a third party wishes to help someone obtain credit by providing their personal guarantee. Swiss law mandates this formal agreement structure to protect both guarantors and creditors by clearly defining obligations and limitations.

Key legal considerations

Your guarantee agreement must specify the maximum amount of your liability, as unlimited guarantees are heavily restricted under Swiss law. The document must clearly identify the principal debt being guaranteed, including specific reference to the underlying agreement or obligation. You should understand that as a guarantor, you become personally liable for the debt if the principal debtor defaults, and creditors may pursue you directly without first exhausting remedies against the primary debtor. The agreement should include termination provisions specifying when your guarantee obligations end, and any conditions for early release. Pay particular attention to clauses regarding interest, costs, and fees, as these can significantly increase your potential liability beyond the principal amount.

Legal requirements in Switzerland

Swiss Code of Obligations Articles 492-512 govern guarantee agreements and impose strict formal requirements that you must follow. The agreement must be in writing and signed by you as the guarantor, with specific mandatory content including the maximum guarantee amount expressed in figures or a determinable calculation method. If you are a natural person providing a guarantee, Swiss law limits your liability to CHF 2 million unless you can demonstrate professional competence in the relevant business area. Spousal consent is required under Article 494 when the guarantee could significantly affect family assets or when you are married under a property regime that includes common property. The document must be properly witnessed or notarised depending on the guarantee amount and type. Additionally, you have specific rights including the right to be informed of the principal debtor's payment defaults and the right to demand that the creditor first pursue the principal debtor in certain circumstances.