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Loan Guarantor Agreement Form for United Arab Emirates

Loan Guarantor Agreement Form Template for United Arab Emirates

A comprehensive legal document governed by UAE law that establishes a guarantee relationship whereby a guarantor assumes responsibility for the debt obligations of a borrower to a lender. The agreement complies with UAE Civil Code requirements and potentially Islamic finance principles, detailing the scope of the guarantee, payment obligations, enforcement mechanisms, and the rights and obligations of all parties involved. It includes specific provisions for UAE jurisdiction, ensuring enforceability under local laws while providing security for the lender and clearly defining the guarantor's responsibilities.

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What is a Loan Guarantor Agreement Form?

The Loan Guarantor Agreement Form is a crucial legal instrument in the UAE banking and financial sector, used when a third party (guarantor) agrees to secure the loan obligations of a borrower. This document is essential in various commercial and personal lending scenarios, particularly when additional security is required by UAE banks and financial institutions. The agreement must comply with UAE Civil Code (Federal Law No. 5 of 1985) provisions regarding guarantees, UAE Banking Law requirements, and where applicable, Islamic finance principles. It typically includes detailed sections on the guarantee's scope, enforcement mechanisms, guarantor's obligations, and specific provisions required under UAE law. The document is commonly used in corporate financing, real estate transactions, and commercial lending, providing lenders with additional security while clearly defining the guarantor's obligations and liability limits.

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

1. Parties: Identification of the Lender, Borrower, and Guarantor with full legal names and addresses

2. Background: Context of the underlying loan agreement and the purpose of this guarantee

3. Definitions: Key terms used throughout the agreement, including 'Guaranteed Obligations', 'Security', and 'Event of Default'

4. Guarantee and Indemnity: Core guarantee provisions, including scope of the guarantee and indemnification obligations

5. Nature of Guarantee: Specification that this is a continuing guarantee and details of its unconditional nature

6. Guarantor's Representations and Warranties: Guarantor's confirmations regarding capacity, authority, and financial condition

7. Payment Mechanics: Procedures and timing for payments under the guarantee

8. Costs and Expenses: Allocation of costs related to the preparation and enforcement of the guarantee

9. Duration and Release: Term of the guarantee and conditions for its release or termination

10. Communications: Notice requirements and contact details for all parties

11. Governing Law and Jurisdiction: Specification of UAE law as governing law and jurisdiction for disputes

12. Execution: Signature blocks and execution formalities

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

1. Islamic Finance Compliance: Required when the guarantee needs to comply with Shariah principles

2. Corporate Authorization: Required when the guarantor is a corporate entity, including board resolutions and authority details

3. Security Provisions: Include when the guarantee is secured by specific assets

4. Co-Guarantors: Required when multiple guarantors are involved, defining joint and several liability

5. Currency Provisions: Include when the guarantee involves cross-border transactions or multiple currencies

6. Assignment and Transfer: Include when the lender may want to transfer rights under the guarantee

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

1. Schedule 1 - Form of Demand: Template for making a demand under the guarantee

2. Schedule 2 - Underlying Loan Agreement: Copy or key terms of the loan agreement being guaranteed

3. Schedule 3 - Security Details: Details of any security provided in support of the guarantee

4. Schedule 4 - Corporate Authorizations: Copies of relevant board resolutions and corporate authorizations

5. Appendix A - Calculation of Guaranteed Amount: Methodology for calculating the guaranteed amount if variable

6. Appendix B - Compliance Certificates: Templates for ongoing compliance certification by the guarantor

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

Publisher

Genie AI

Document Type

Guarantor Agreement

Sector

Banking

Cost

Free to use

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