Promissory Note Personal Guarantee Language for the United Kingdom

Promissory Note Personal Guarantee Language Template for England and Wales

A Promissory Note Personal Guarantee is a legally binding document under English and Welsh law where an individual (the guarantor) personally guarantees to pay a specified sum or fulfill certain obligations if another party (the principal debtor) fails to do so. This document combines elements of both a promissory note and a personal guarantee, providing enhanced security for the beneficiary while establishing clear payment obligations and terms. It must comply with specific requirements under English law to be enforceable, including being in writing and properly executed.

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What is a Promissory Note Personal Guarantee Language?

The Promissory Note Personal Guarantee Language is essential in situations where additional security is required for financial obligations under English and Welsh law. This document is commonly used in lending arrangements, business transactions, and financial agreements where one party seeks personal assurance for another's obligations. It combines the direct payment promise of a promissory note with the security of a personal guarantee, making it particularly useful for creditors seeking enhanced protection. The document must include specific elements to be enforceable, such as clear payment terms, identification of all parties, and proper execution requirements.

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

1. 1. Date and Parties: Identification of the guarantor, beneficiary, and principal debtor with full legal names and addresses

2. 2. Amount Guaranteed: Clear specification of the guaranteed sum or obligation, including maximum liability if applicable

3. 3. Payment Terms: Detailed terms of when and how payments must be made under the guarantee, including payment mechanics

4. 4. Guarantee Statement: Express statement of guarantee including its unconditional nature and primary obligations of the guarantor

5. 5. Duration: Period of effectiveness of the guarantee and any termination provisions

6. 6. Enforcement: Rights and mechanisms for enforcing the guarantee, including any notice requirements

7. 7. Execution: Formal execution block for signatures, including witness requirements if applicable

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

1. Interest Provisions: Optional terms for interest charges on late payments, including calculation method and rates

2. Security Provisions: Details of any additional security provided to support the guarantee

3. Assignment Rights: Provisions governing the right to assign or transfer the guarantee

4. Representations and Warranties: Additional declarations and assurances from the guarantor regarding their capacity and authority

5. Governing Law and Jurisdiction: Explicit choice of law and jurisdiction provisions where cross-border elements exist

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

1. Schedule 1: Guaranteed Obligations: Detailed itemization of the specific obligations being guaranteed

2. Schedule 2: Payment Schedule: Detailed payment terms if payments are to be made in installments

3. Schedule 3: Security Details: Specification of any associated security or collateral supporting the guarantee

4. Schedule 4: Demand Form: Pro-forma demand notice template for calling upon 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

England and Wales

Publisher

Genie AI

Document Type

Promissory Note

Sector

Banking

Cost

Free to use
Industries

Law of Property Act 1925: Primary legislation governing property law in England and Wales, relevant for security interests and enforcement rights in relation to guarantees

Statute of Frauds 1677: Historical but still relevant legislation requiring guarantees to be made in writing and signed to be legally enforceable

Consumer Credit Act 1974: Legislation governing consumer credit agreements and related guarantees, providing additional protections when the guarantee relates to consumer credit

Unfair Contract Terms Act 1977: Controls the use of exclusion and limitation clauses in contracts, including guarantees, particularly important for business-to-business transactions

Consumer Rights Act 2015: Modern legislation protecting consumer rights, particularly relevant if one party to the guarantee is acting as a consumer

Contracts (Rights of Third Parties) Act 1999: Governs how third parties may enforce terms of a contract, including guarantees, that purport to confer benefits on them

Limitation Act 1980: Sets out the time limits within which different types of legal claims must be brought, including claims under guarantees

Common Law Doctrine of Consideration: Legal principle requiring that something of value must be exchanged for a guarantee to be legally binding

Rules on Deed Execution: Common law and statutory requirements for the proper execution of deeds, which may be relevant if the guarantee is executed as a deed

Contractual Interpretation Principles: Common law rules governing how courts interpret contractual documents, including guarantees

Financial Services and Markets Act 2000: Regulatory framework for financial services in the UK, may be relevant if the guarantee relates to regulated financial activities

FCA Regulations: Financial Conduct Authority regulations that may apply if the guarantee relates to regulated financial activities or regulated entities

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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