Guarantee Promissory Note for Singapore

Guarantee Promissory Note Template for Singapore

A Guarantee Promissory Note under Singapore law is a legally binding instrument that combines elements of a promissory note with a guarantee agreement. It documents an unconditional promise to pay a specified sum of money, supported by a third-party guarantee. The document is governed by Singapore's Bills of Exchange Act and Civil Law Act, providing security to the payee through both the maker's primary obligation and the guarantor's secondary commitment to pay.

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What is a Guarantee Promissory Note?

A Guarantee Promissory Note is commonly used in Singapore when parties require additional security for a payment obligation. This document is particularly valuable in commercial transactions where the creditworthiness of the primary debtor needs enhancement through a guarantor's backing. The instrument is subject to Singapore's robust commercial law framework, including the Bills of Exchange Act and Civil Law Act, making it an effective tool for securing payment obligations. It includes specific details about payment terms, guarantee conditions, and enforcement mechanisms, providing clear rights and obligations for all parties involved.

What sections should be included in a Guarantee Promissory Note?

1. Parties: Identifies maker (promisor), payee (promisee), and guarantor with full legal names and addresses

2. Background: Context of the promissory note and guarantee arrangement

3. Definitions: Key terms used throughout the document

4. Promise to Pay: Unconditional promise to pay a specific sum with clear payment terms

5. Payment Terms: Detailed terms including amount, currency, interest rate, and payment schedule

6. Guarantee Provisions: Terms of guarantee including scope, nature of guarantor's obligations, and enforcement rights

7. Representations and Warranties: Statements of fact and assurances from both maker and guarantor

8. Execution Requirements: Formal requirements for valid execution including witnessing and stamping

What sections are optional to include in a Guarantee Promissory Note?

1. Security Provisions: Terms relating to any collateral or security provided for the note

2. Events of Default: Circumstances that trigger immediate repayment or enforcement rights

3. Assignment Provisions: Terms regarding transferability and assignment of the note

4. Governing Law and Jurisdiction: Specific provisions about applicable law and courts having jurisdiction

What schedules should be included in a Guarantee Promissory Note?

1. Payment Schedule: Detailed breakdown of payment dates, amounts, and interest calculations

2. Security Details: Specific description of any security or collateral provided

3. Form of Notice: Template for any notices required under the note

4. Guarantee Terms: Detailed terms and conditions of the guarantee if complex

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Singapore

Publisher

Genie AI

Document Type

Promissory Note

Sector

Banking

Cost

Free to use
Industries

Bills of Exchange Act (Chapter 23): Primary legislation governing negotiable instruments including promissory notes. Defines requirements for valid promissory notes and sets out rights and obligations of parties.

Contracts Act (Chapter 53): Fundamental law governing contract formation, consideration requirements, and capacity to contract. Essential for the basic structure of the promissory note and guarantee.

Civil Law Act (Chapter 43): Contains key provisions relating to guarantees and indemnities, including requirements for valid guarantees and their enforcement.

Limitation Act (Chapter 163): Establishes time limits for enforcement of promissory notes and limitation periods for guarantee obligations.

Money-lenders Act (Chapter 188): Regulatory framework for money lending activities, applicable if the note involves money lending transactions.

Property Law Act (Chapter 242): Relevant when the promissory note is secured against property, governing the security aspects of the transaction.

MAS Regulations: Monetary Authority of Singapore regulations applicable if the transaction involves regulated financial activities.

Stamp Duties Act (Chapter 312): Governs stamp duty requirements and tax implications for legal instruments including promissory notes and guarantees.

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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