The Guarantee Promissory Note is a crucial financial instrument in Nigerian business transactions where additional security is required for debt obligations. It is commonly used in situations where a creditor requires both a primary promise of payment and a secondary guarantee from a financially stable third party. The document combines the features of a standard promissory note under the Bills of Exchange Act with guarantee provisions that must comply with Nigerian contract law and the Statute of Frauds requirements. This type of document is particularly valuable in commercial lending, business financing, and large-scale transactions where the creditor seeks to minimize risk through multiple layers of payment assurance. The Guarantee Promissory Note typically includes comprehensive details about payment terms, interest rates, default provisions, and enforcement mechanisms, while clearly defining the scope and nature of the guarantor's obligations.

1. Parties: Identifies the Maker (primary debtor), the Payee (creditor), and the Guarantor

2. Background: Explains the context of the debt obligation and the reason for the guarantee

3. Definitions: Defines key terms used throughout the document

4. Promise to Pay: Contains the unconditional promise to pay a specific sum, including the amount, currency, and maturity date

5. Interest Rate: Specifies the applicable interest rate, calculation method, and payment frequency

6. Payment Terms: Details the payment schedule, method of payment, and place of payment

7. Guarantee Provisions: Contains the guarantor's unconditional promise to pay upon default of the maker

8. Guarantor's Obligations: Specifies the scope and nature of the guarantee, including whether it is continuing and irrevocable

9. Default Events: Lists circumstances constituting default under the note

10. Enforcement: Details the rights and remedies of the payee upon default

11. Governing Law: Specifies Nigerian law as the governing law

12. Execution: Space for signatures, witnesses, and dates