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Guarantor Indemnity Agreement

Guarantor Indemnity Agreement Template for India

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Key Requirements PROMPT example:

Guarantor Indemnity Agreement

"I need a Guarantor Indemnity Agreement under Indian law where ABC Manufacturing Ltd will act as corporate guarantor for XYZ Industries' 50 million rupee loan facility from State Bank of India, with the guarantee covering all obligations until March 2025."

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Document background
The Guarantor Indemnity Agreement is a crucial legal instrument in Indian commercial and financial transactions where additional security is required for credit facilities or other obligations. This document is commonly used when a creditor requires extra assurance beyond the principal debtor's covenant, typically in situations involving substantial loans, complex commercial transactions, or when the principal debtor's creditworthiness needs enhancement. The agreement combines both guarantee and indemnity obligations, providing the creditor with comprehensive protection under Indian law. It is structured to comply with the Indian Contract Act, 1872, and other relevant legislation, while incorporating market standard provisions for enforcement and risk mitigation. The document is particularly important in corporate finance, real estate transactions, and project financing, where multiple stakeholders and substantial financial commitments are involved.
Suggested Sections

1. Parties: Identification of all parties: the creditor, principal debtor, and guarantor(s)

2. Background: Context of the primary obligation and reason for the guarantee and indemnity

3. Definitions and Interpretation: Definitions of key terms and interpretation rules

4. Guarantee: Terms and scope of the guarantee obligation

5. Indemnity: Terms and scope of the indemnity obligation

6. Extent and Duration of Liability: Limits and duration of guarantor's obligations

7. Guarantor's Representations and Warranties: Confirmations and statements by the guarantor regarding their capacity and authority

8. Continuing Security: Provisions establishing the guarantee as a continuing obligation

9. Preservation of Rights: Creditor's rights preservation and non-prejudice provisions

10. Payments: Payment obligations, timing, and method

11. Costs and Expenses: Allocation of costs related to the agreement

12. Notices: Communication procedures between parties

13. General Provisions: Standard boilerplate clauses including severability, amendments, governing law

Optional Sections

1. Security: Include when additional security is provided alongside the guarantee

2. Assignment and Transfer: Include when rights under the agreement may need to be transferred

3. Multiple Guarantors: Include when there is more than one guarantor to address joint and several liability

4. Subordination: Include when the guarantor's claims need to be subordinated to the creditor's rights

5. Power of Attorney: Include when the creditor requires power to execute certain actions on behalf of the guarantor

6. Currency Indemnity: Include for cross-border transactions involving multiple currencies

7. Set-off Rights: Include when specific set-off rights need to be established

Suggested Schedules

1. Primary Obligation Details: Details of the main agreement or obligation being guaranteed

2. Guarantor Information: Detailed information about the guarantor including assets and financial status

3. Guarantee Limit: If applicable, specific limits on the guarantee amount

4. Secured Obligations: Detailed list of obligations covered by the guarantee and indemnity

5. Form of Notice: Standard forms for various notices under the agreement

6. Security Documents: List and copies of related security documents if applicable

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

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant Industries

Banking and Financial Services

Real Estate

Manufacturing

Construction

Infrastructure

Retail

Healthcare

Education

Telecommunications

Information Technology

Energy and Utilities

Transportation and Logistics

Relevant Teams

Legal

Finance

Risk Management

Treasury

Compliance

Credit

Corporate Secretarial

Commercial Operations

Banking Operations

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Lawyer

Risk Manager

Credit Manager

Treasury Manager

Compliance Officer

Company Secretary

Financial Controller

Commercial Director

Banking Relationship Manager

Security Trustee

Loan Officer

Credit Risk Analyst

Industries
Indian Contract Act, 1872: Primary legislation governing contracts in India, particularly Sections 124-147 dealing with contracts of indemnity and guarantee, including the rights and obligations of surety
Transfer of Property Act, 1882: Relevant when the guarantee involves immovable property or creation of security interests
Specific Relief Act, 1963: Governs the enforcement of contracts and provides remedies in case of breach of guarantee or indemnity obligations
Limitation Act, 1963: Prescribes time limits within which legal actions must be initiated for enforcement of guarantees and indemnities
Indian Stamp Act, 1899: Determines the stamp duty payable on guarantee and indemnity agreements to make them legally admissible in court
Registration Act, 1908: May be relevant if the guarantee agreement requires registration, particularly when involving immovable property
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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