Agreement Of Personal Guaranty Template for Philippines

An Agreement of Personal Guaranty is a crucial legal instrument in Philippine business transactions, commonly used when additional security is required for loans, credit facilities, or other financial obligations. This document, governed by Articles 2047-2084 of the Civil Code of the Philippines, establishes a secondary obligation where the guarantor promises to pay or perform if the principal debtor fails to do so. The agreement is particularly important in commercial lending, property leasing, and business contracts where the creditor requires additional assurance beyond the principal debtor's commitment. It must specify the guaranteed obligations, conditions for enforcement, and rights and obligations of all parties involved. The document requires careful drafting to ensure enforceability under Philippine law and typically needs notarization for added legal security.

1. Parties: Identifies the Guarantor, the Creditor, and the Principal Debtor, including their complete legal names and addresses

2. Background: Explains the context of the guaranty, including the primary obligation being guaranteed and the relationship between the parties

3. Definitions: Defines key terms used throughout the agreement for clarity and legal certainty

4. Scope of Guaranty: Clearly defines the extent of the guaranteed obligations, including the maximum amount if applicable

5. Nature of Guaranty: Specifies whether it's continuing, limited, or unlimited, and whether it's a guaranty of payment or collection

6. Guarantor's Obligations: Details the specific obligations and commitments of the guarantor

7. Payment Terms: Specifies when and how the guarantor must fulfill their obligations upon default by the principal debtor

8. Representations and Warranties: Statements by the guarantor about their legal capacity and financial ability to fulfill the guaranty

9. Events of Default: Defines what constitutes a default under the primary obligation and this guaranty

10. Rights of the Creditor: Outlines the creditor's rights and remedies in case of default

11. Duration and Termination: Specifies the term of the guaranty and conditions for its termination

12. Governing Law: Confirms Philippine law as governing law and specifies jurisdiction for disputes

13. Execution: Signature blocks and execution requirements for all parties