Guaranty Fee Agreement Template for Philippines

The Guaranty Fee Agreement is essential in Philippine commercial and financial transactions where one party (the guarantor) agrees to guarantee the obligations of another party in exchange for a fee. This document becomes necessary when establishing formal compensation arrangements for guarantee services, particularly in business loans, property leases, or major commercial contracts. The agreement must comply with Philippine Civil Code requirements regarding guarantees and contract formation, while also addressing relevant banking and financial regulations if financial institutions are involved. A properly structured Guaranty Fee Agreement helps prevent future disputes by clearly outlining the fee calculation method, payment terms, and conditions under which the guarantee and corresponding fee obligations may be modified or terminated. This document is particularly important in the Philippine context where formal documentation of financial arrangements is crucial for both legal compliance and business certainty.

1. Parties: Identifies and provides complete details of the Guarantor, the party receiving the guarantee, and the party paying the guarantee fee

2. Background: Explains the context of the guarantee arrangement and the reason for the guarantee fee agreement

3. Definitions: Defines key terms used throughout the agreement, including 'Guarantee', 'Guarantee Fee', 'Principal Obligation', etc.

4. Guarantee Fee: Specifies the amount or calculation method of the guarantee fee and the basis for such fee

5. Payment Terms: Details the payment schedule, method of payment, and currency of the guarantee fee

6. Guarantor's Obligations: Outlines the specific obligations and duties of the Guarantor under the agreement

7. Representations and Warranties: Contains statements of fact and promises made by both parties

8. Term and Termination: Specifies the duration of the agreement and circumstances for termination

9. Governing Law and Jurisdiction: Establishes Philippine law as governing law and specifies jurisdiction for dispute resolution

10. Notices: Specifies how and where official communications between parties should be sent

11. Execution: Signature blocks and execution formalities