Personal Guarantee Agreement Template for the Netherlands

A Personal Guarantee Agreement is a legal document that makes you personally liable for another party's debts or obligations under Dutch law. This security instrument is governed by the Dutch Civil Code's suretyship provisions (borgtocht) and provides creditors with additional assurance when extending credit or entering commercial arrangements.

When do you need this document?

You typically need a Personal Guarantee Agreement when banks or lenders require additional security for business loans, especially for small companies or startups with limited credit history. Property landlords often request personal guarantees from company directors when leasing commercial premises to businesses. Suppliers may require personal guarantees before extending trade credit terms to new or financially uncertain customers. Parent companies frequently provide personal guarantees for their subsidiaries' obligations, and investors may guarantee startup debts to secure favorable terms.

Key legal considerations

The guarantee must clearly define the scope of guaranteed obligations, including whether it covers principal debt, interest, costs, and penalties. You should establish maximum liability limits to cap your exposure and specify the guarantee's duration and termination conditions. The agreement must address whether the guarantee is joint and several (hoofdelijke aansprakelijkheid) and include proper notice requirements for default situations. Consider including release conditions such as material changes to the principal agreement or creditor's failure to pursue the principal debtor first. Ensure the document specifies applicable law and jurisdiction for dispute resolution.

Legal requirements in Netherlands

Under Dutch Civil Code Book 6 and 7, guarantee agreements must be in writing and clearly specify the guaranteed obligations. The Financial Supervision Act applies additional requirements when guarantees involve regulated financial entities. Consumer protection laws provide special safeguards for individual guarantors, including mandatory cooling-off periods and maximum liability restrictions in certain circumstances. The Bankruptcy Act governs how guarantees are treated during insolvency proceedings. For significant guarantees, notarial involvement may be required, particularly for real estate-related obligations. The agreement must comply with Dutch contract law principles, including good faith performance and reasonableness standards.