Guarantor In Loan Agreement for Singapore

Guarantor In Loan Agreement Template for Singapore

A Guarantor In Loan Agreement under Singapore law is a legally binding document where a third party (the guarantor) commits to fulfill the borrower's loan obligations if the borrower defaults. The agreement is governed by Singapore's Civil Law Act and must be in writing. It outlines the guarantor's obligations, limitations of liability, and the circumstances under which the guarantee can be enforced.

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What is a Guarantor In Loan Agreement?

A Guarantor In Loan Agreement is essential in Singapore's lending landscape where additional security is required for loan approval. This document is commonly used when a borrower's creditworthiness alone is insufficient to secure a loan, requiring a third party to guarantee the debt. The agreement must comply with Singapore's Civil Law Act and related legislation, clearly defining the guarantor's obligations, enforcement mechanisms, and any limitations on liability. It typically includes details of the primary loan agreement, the scope of the guarantee, and the circumstances that trigger the guarantor's obligations.

What sections should be included in a Guarantor In Loan Agreement?

1. Parties: Identifies and defines all parties: Lender, Borrower, and Guarantor

2. Background: Explains the context of the loan and guarantee arrangement

3. Definitions: Defines key terms used throughout the agreement

4. Guarantee and Indemnity: Core terms of the guarantee, including scope and extent of guarantor's liability

5. Guarantor's Representations and Warranties: Statements of fact and assurances provided by the guarantor

6. Duration of Guarantee: Terms regarding the duration and termination of the guarantee

7. Enforcement Rights: Lender's rights to enforce the guarantee

What sections are optional to include in a Guarantor In Loan Agreement?

1. Security Provisions: Details of any security provided by the guarantor - use when the guarantee is secured by specific assets

2. Multiple Guarantors: Provisions for joint and several liability - use when there is more than one guarantor

3. Cross-Default: Provisions linking this guarantee to other agreements - use when there are related loan agreements or guarantees

What schedules should be included in a Guarantor In Loan Agreement?

1. Schedule 1 - Principal Loan Agreement: Copy or summary of the main loan agreement being guaranteed

2. Schedule 2 - Security Details: Details of any security provided under the guarantee

3. Schedule 3 - Guarantor's Statement of Assets: Declaration of guarantor's financial position

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

Loan Agreement

Sector

Banking

Cost

Free to use
Clauses
Industries

Civil Law Act (Cap. 43): Primary legislation governing contracts and guarantees in Singapore, particularly Section 6 (Statute of Frauds) requiring guarantees to be in writing

Contracts (Rights of Third Parties) Act: Legislation governing how third parties may enforce terms of a contract, relevant for guarantee arrangements

Moneylenders Act: Regulatory framework for loans from licensed moneylenders in Singapore, including provisions affecting guarantors

Banking Act: Regulatory framework for banking institutions in Singapore, including provisions affecting loan guarantees

Overseas Union Bank Ltd v Chua Teng Hwa [1999]: Key Singapore case law establishing principles for guarantor agreements

Deutsche Bank AG v Chang Tse Wen [2013]: Significant case law regarding the interpretation and enforcement of guarantees in Singapore

Liang Huat Aluminium Industries Pte Ltd v Elite Team Management Pte Ltd [2012]: Important case law establishing principles for guarantee enforcement in Singapore

MAS Guidelines: Regulatory guidelines from the Monetary Authority of Singapore affecting banking and financial transactions including guarantees

Fair Trading Act: Consumer protection legislation that may affect guarantee agreements involving individual guarantors

Writing Requirement: Legal requirement that guarantee agreements must be in writing and signed to be enforceable

Party Identification Requirement: Legal requirement for clear identification of all parties involved in the guarantee agreement

Obligation Definition Requirement: Legal requirement for explicit statement of the guarantor's obligations and clear definition of the primary debt

Teams

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