For example, if a surety has guaranteed the payment of ₦50,000 and the borrower ₦ 100,000 debts and cannot repay that amount, the surety is only required to pay the ₦50,000 ₦ (since the guaranteed amount) and the lender or creditor must sue the borrower for the balance – 50,000 ₦. The extent of bail liability may be limited or unlimited. A guarantor`s liability is unlimited if he guarantees that he will settle all of the borrower`s debts, including principal, interest and late fees, except that the parties agree otherwise. The liability of a surety is limited if the surety agrees to pay only a specified amount in the event of the borrower`s default. Boerge is a party that agrees to pay a debtor`s debts in the event of default. Depending on the type of contract, the surety may deposit a body value (for example. B, land, construction vehicles, etc.) which will be sold and used to pay off debts if the surety does not pay all the debts it guarantees. Note that the borrower or debtor has primary responsibility to the lender in the event of a loan or financing contract, as the liability of the surety arises only in the case of the debtor`s default. If one of the parties is an organization other than a company, an Organization official should sign the document and ensure that a witness confirms the document by writing his name, address, occupation and signature on the line directly under the officer`s signature in the document. A guarantee contract is a contract by which a surety agrees to repay another person`s debts if the person is unable to repay his debts.
In other words, the surety assumes responsibility for the debts liability by the debtor in case the debtor does not pay. Other names for the document: warranty contract, guarantee contract, third-party warranty contract, guarantee form, form of guarantee agreement.