Continuing Guarantee Agreement for Hong Kong

Continuing Guarantee Agreement Template for Hong Kong

A comprehensive legal document governed by Hong Kong law that establishes an ongoing guarantee arrangement where one party (the guarantor) agrees to be responsible for the financial obligations of another party (the principal debtor) to a third party (the creditor). The agreement remains effective until explicitly terminated and covers both present and future obligations. It incorporates specific provisions required under Hong Kong legislation, including compliance with the Contract Ordinance and Banking Ordinance where applicable, and typically includes detailed terms regarding enforcement, representations, and warranties.

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What is a Continuing Guarantee Agreement?

The Continuing Guarantee Agreement is a vital instrument in Hong Kong's commercial landscape, commonly used in various business financing arrangements. It provides creditors with ongoing security for both existing and future obligations of a principal debtor, making it particularly valuable in revolving credit facilities, long-term business relationships, and corporate financing structures. The agreement must comply with Hong Kong's legal framework, particularly the Contract Ordinance (Cap. 26) and related legislation. It typically includes comprehensive provisions covering the scope of guaranteed obligations, enforcement mechanisms, and termination procedures. This type of guarantee is distinct from a one-off guarantee as it continues in force until expressly revoked, providing broader protection for creditors while requiring careful consideration from guarantors due to its extensive obligations.

What sections should be included in a Continuing Guarantee Agreement?

1. Parties: Identifies the guarantor, creditor, and principal debtor

2. Background: Sets out the context of the guarantee and the relationship between the parties

3. Definitions and Interpretation: Defines key terms used in the agreement and interpretation rules

4. Guarantee and Indemnity: Core section establishing the guarantee obligations and indemnity provisions

5. Extent and Nature of the Guarantee: Details the scope, limitations, and continuing nature of the guarantee

6. Guarantor's Representations and Warranties: Statements of fact and assurances given by the guarantor

7. Payments and Interest: Terms regarding payment obligations, interest, and calculation methods

8. Preservation of Rights: Provisions maintaining the creditor's rights in various circumstances

9. Enforcement and Recovery: Process and rights for enforcing the guarantee and recovering amounts due

10. Termination: Conditions and process for terminating the guarantee

11. General Provisions: Standard boilerplate clauses including notices, amendments, and governing law

What sections are optional to include in a Continuing Guarantee Agreement?

1. Security: Include when the guarantee is supported by specific security arrangements

2. Multiple Guarantors: Required when there is more than one guarantor, addressing joint and several liability

3. Subordination: Include when the guarantor's rights need to be subordinated to other creditors

4. Costs and Expenses: Detailed section on costs when complex fee arrangements apply

5. Financial Covenants: Include when specific financial requirements are imposed on the guarantor

6. Assignment and Transfer: Detailed provisions when rights under the guarantee may need to be transferred

7. Power of Attorney: Include when the creditor requires specific powers to act on behalf of the guarantor

What schedules should be included in a Continuing Guarantee Agreement?

1. Schedule 1 - Guaranteed Obligations: Details of the underlying obligations being guaranteed

2. Schedule 2 - Guarantee Limit and Interest Calculations: Specific financial limits and interest calculation methods

3. Schedule 3 - Form of Demand: Standard form for making demands under the guarantee

4. Schedule 4 - Security Details: Description of any security provided (if applicable)

5. Schedule 5 - Notice Details: Contact information and notice requirements for all parties

6. Appendix A - Related Agreements: List and details of related agreements referenced in 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

Hong Kong

Publisher

Genie AI

Document Type

Employment Contract

Cost

Free to use
Clauses
Relevant Industries

Banking and Financial Services

Real Estate

Construction

Manufacturing

Trading and Commerce

Professional Services

Retail

Hospitality

Import/Export

Technology

Relevant Teams

Legal

Finance

Risk Management

Compliance

Treasury

Corporate Secretarial

Credit Control

Commercial Operations

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Company Secretary

Credit Manager

Risk Manager

Commercial Director

Treasury Manager

Compliance Officer

Corporate Banking Manager

Senior Legal Manager

Financial Controller

Credit Risk Officer

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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