Guaranty Agreement Template for Indonesia

The Guaranty Agreement is a crucial document in Indonesian commercial and financial transactions, used when additional security is required for financial obligations. This agreement type is commonly employed in lending arrangements, corporate transactions, and commercial contracts where credit enhancement is needed. The document must comply with Indonesian Civil Code (KUHPer) requirements and relevant financial regulations, particularly when involving regulated entities. The agreement typically includes detailed provisions about the guarantee's scope, enforcement mechanisms, and the parties' rights and obligations. It's essential in various contexts, from simple bilateral arrangements to complex syndicated financing structures, and must be carefully drafted to ensure enforceability under Indonesian law.

1. Parties: Identification of the Guarantor, the Beneficiary (creditor), and reference to the Principal Debtor

2. Background: Context of the guarantee, reference to the primary obligation being guaranteed, and the relationship between the parties

3. Definitions and Interpretation: Definitions of key terms, interpretation rules, and construction of the agreement

4. Guarantee and Indemnity: Core guarantee obligations, scope of the guarantee, and indemnification provisions

5. Nature and Extent of Guarantee: Details of what is being guaranteed, maximum liability, and whether the guarantee is conditional or unconditional

6. Representations and Warranties: Guarantor's representations about capacity, authority, and financial condition

7. Payment Mechanics: Process for making payments, currency provisions, and payment priorities

8. Continuing Security: Provisions establishing the guarantee as continuing security until obligations are fully discharged

9. Enforcement: Rights and remedies of the Beneficiary upon default, including enforcement procedures

10. Discharge and Release: Conditions for discharge of the guarantee and release of the Guarantor

11. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and jurisdiction for disputes

12. Notices: Communication procedures and contact details for formal notices

13. Miscellaneous: Standard boilerplate provisions including severability, amendments, and counterparts