Guarantor Letter for Germany

Guarantor Letter Template for Germany

A Guarantor Letter (Bürgschaftserklärung) under German law is a formal written declaration where a guarantor assumes liability for the obligations of a principal debtor to a creditor. Governed by the German Civil Code (BGB), particularly §§ 765-778, this document must meet specific form requirements and clearly state the scope of the guarantee obligation. The letter serves as a legally binding commitment that provides security to the creditor while establishing the precise terms and conditions under which the guarantor can be called upon to fulfill the guaranteed obligations. It must comply with German consumer protection laws when the guarantor is a private individual and may require notarization in certain circumstances.

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What is a Guarantor Letter?

The Guarantor Letter (Bürgschaftserklärung) is a crucial document in German business and financial transactions, used when additional security is required for obligations between parties. This document is commonly employed in scenarios such as loan agreements, lease contracts, or commercial transactions where a third party's financial backing is needed to secure the principal debtor's obligations. Under German law, particularly the Civil Code (BGB), the letter must meet strict form requirements and clearly define the scope of the guarantee. It's essential in risk management and credit security, providing creditors with additional assurance while clearly establishing the guarantor's obligations. The document must be carefully drafted to comply with German consumer protection regulations when involving private individuals as guarantors, and may require notarization for certain high-value transactions or real estate matters.

What sections should be included in a Guarantor Letter?

1. Date and Place: The date and location of the guarantee's execution, essential for legal validity

2. Guarantor Details: Full legal name, address, and identification details of the guarantor

3. Creditor Details: Full legal name and address of the beneficiary of the guarantee

4. Principal Debtor Details: Identity of the principal debtor whose obligations are being guaranteed

5. Underlying Obligation: Clear description of the main obligation being guaranteed (loan agreement, rental contract, etc.)

6. Guarantee Declaration: Express statement of guarantee and its nature (e.g., absolute, unconditional, irrevocable)

7. Scope of Guarantee: Specific amount or limitation of the guarantee obligation

8. Duration: Term of the guarantee and any conditions for termination

9. Signature Block: Space for guarantor's signature, meeting written form requirements

What sections are optional to include in a Guarantor Letter?

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

2. Limitation Clause: Used when the guarantee is limited to a specific amount or specific obligations

3. Enforcement Conditions: Specific conditions that must be met before the guarantee can be called upon

4. Waiver of Defenses: Optional waiver of specific statutory defenses available to guarantors

5. Notice Requirements: Specific requirements for making demands under the guarantee

6. Consumer Protection Notice: Required when the guarantor is a consumer, including specific warnings about the risks

7. Release Conditions: Specific conditions under which the guarantor may be released from obligations

What schedules should be included in a Guarantor Letter?

1. Schedule 1 - Underlying Agreement: Copy or key details of the agreement being guaranteed

2. Schedule 2 - Secured Amounts: Detailed breakdown of the guaranteed amounts, including any caps or limitations

3. Schedule 3 - Related Security: Details of any other security or guarantees related to the same underlying obligation

4. Appendix A - Required Documents: List of documents required for making a demand under the guarantee

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

Jurisdiction

Germany

Publisher

Genie AI

Document Type

Service Letter

Cost

Free to use
Relevant Industries

Banking and Financial Services

Real Estate

Construction

Manufacturing

Retail

Commercial Leasing

Import/Export

Professional Services

Technology

Hospitality

Relevant Teams

Legal

Finance

Risk Management

Treasury

Compliance

Commercial

Credit Administration

Corporate Banking

Real Estate

Business Development

Relevant Roles

Legal Counsel

Finance Director

Credit Risk Manager

Commercial Director

Chief Financial Officer

Treasury Manager

Compliance Officer

Contract Manager

Real Estate Manager

Business Development Manager

Risk Assessment Officer

Corporate Banking Officer

Relationship Manager

Credit Analyst

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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