Affidavit Of Guarantee Template for Malaysia

An Affidavit Of Guarantee is a sworn legal document that formally records your commitment to guarantee another party's financial obligations under Malaysian law. When you sign this document before a Commissioner for Oaths, you're creating legally binding evidence of your guarantee arrangement that can be used in court proceedings and financial transactions.

When do you need this document?

You'll need an Affidavit Of Guarantee when acting as a guarantor for someone else's loan, credit facility, or business obligation with Malaysian financial institutions. Banks and lenders often require this sworn statement to establish clear legal grounds for pursuing guarantors if the principal debtor defaults. The document is particularly important in corporate financing, property purchases, business loans, and personal credit arrangements where additional security is required. Islamic banking institutions also use this document for Shariah-compliant financing, ensuring the guarantee structure meets religious requirements while maintaining legal enforceability.

Key legal considerations

Your Affidavit Of Guarantee must clearly specify the scope and limitations of your guarantee obligations, including maximum amounts, time periods, and specific debts covered. The document should include comprehensive details about your financial capacity, relationship to the principal debtor, and understanding of the risks involved. It's crucial to include proper disclosure clauses about your assets, income, and any existing liabilities that might affect your ability to fulfill the guarantee. The affidavit must also address whether you're guaranteeing existing debts only or future obligations, and whether your guarantee is joint, several, or joint and several with other guarantors. Consider including clauses that protect your interests, such as rights to receive notice of default and limitations on your liability.

Legal requirements in Malaysia

Under Malaysian law, your Affidavit Of Guarantee must comply with the Contracts Act 1950, which governs contract formation and validity, ensuring your guarantee meets essential contractual requirements. The document requires proper stamping under the Stamp Act 1949, with stamp duty calculated based on the guaranteed amount or a fixed rate for unlimited guarantees. You must execute the affidavit before a Commissioner for Oaths, who will verify your identity and witness your signature, making it admissible as evidence under the Evidence Act 1950. For corporate guarantors, compliance with the Companies Act 2016 is essential, requiring proper board resolutions and corporate seal where applicable. Islamic banking guarantees must additionally comply with the Islamic Financial Services Act 2013 and obtain approval from Shariah advisory committees. The Powers of Attorney Act 1949 may apply if you're signing on behalf of another party, requiring additional documentation and authorization.