Guarantee Agreement Template for Netherlands

The Guarantee Agreement is a crucial legal instrument in Dutch commercial practice, used to provide additional security for financial obligations or performance commitments. This document is commonly employed in various business contexts, from securing loan agreements to supporting commercial contracts. Under Dutch law, guarantees can take different forms, including personal guarantees (borgtocht) and independent guarantees (bankgarantie), each with specific legal requirements and implications. The Guarantee Agreement must carefully address requirements under the Dutch Civil Code, including form requirements, enforceability conditions, and any limitations on the guarantee's scope. It's particularly important in corporate group structures, project finance, and banking transactions where additional security is required to support primary obligations.

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

2. Background: Context of the guarantee, reference to the underlying obligation being guaranteed, and the commercial rationale

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

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

5. Limits and Maximum Amount: Specification of any limits on the guarantee amount and period

6. Demands and Payments: Process for making demands under the guarantee and payment obligations

7. Nature of Guarantee: Confirmation that the guarantee is independent, irrevocable, and continuing

8. Preservation of Rights: Provisions ensuring the guarantee remains valid despite changes to the underlying obligation or circumstances

9. Representations and Warranties: Guarantor's confirmations about capacity, authority, and financial condition

10. Information Undertakings: Guarantor's obligations to provide financial and other information

11. General Undertakings: Other ongoing obligations of the Guarantor

12. Costs and Expenses: Allocation of costs related to the guarantee

13. Notices: Communication procedures between parties

14. Assignment and Transfer: Rules regarding transfer of rights under the guarantee

15. Governing Law and Jurisdiction: Choice of Dutch law and jurisdiction provisions