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Promissory Note Personal Guarantee Language for the United Kingdom

Promissory Note Personal Guarantee Language Template for England and Wales

A Promissory Note Personal Guarantee is a legally binding document under English and Welsh law where an individual (the guarantor) personally guarantees to pay a specified sum or fulfill certain obligations if another party (the principal debtor) fails to do so. This document combines elements of both a promissory note and a personal guarantee, providing enhanced security for the beneficiary while establishing clear payment obligations and terms. It must comply with specific requirements under English law to be enforceable, including being in writing and properly executed.

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What is a Promissory Note Personal Guarantee Language?

The Promissory Note Personal Guarantee Language is essential in situations where additional security is required for financial obligations under English and Welsh law. This document is commonly used in lending arrangements, business transactions, and financial agreements where one party seeks personal assurance for another's obligations. It combines the direct payment promise of a promissory note with the security of a personal guarantee, making it particularly useful for creditors seeking enhanced protection. The document must include specific elements to be enforceable, such as clear payment terms, identification of all parties, and proper execution requirements.

What sections should be included in a Promissory Note Personal Guarantee Language?

1. 1. Date and Parties: Identification of the guarantor, beneficiary, and principal debtor with full legal names and addresses

2. 2. Amount Guaranteed: Clear specification of the guaranteed sum or obligation, including maximum liability if applicable

3. 3. Payment Terms: Detailed terms of when and how payments must be made under the guarantee, including payment mechanics

4. 4. Guarantee Statement: Express statement of guarantee including its unconditional nature and primary obligations of the guarantor

5. 5. Duration: Period of effectiveness of the guarantee and any termination provisions

6. 6. Enforcement: Rights and mechanisms for enforcing the guarantee, including any notice requirements

7. 7. Execution: Formal execution block for signatures, including witness requirements if applicable

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

1. Interest Provisions: Optional terms for interest charges on late payments, including calculation method and rates

2. Security Provisions: Details of any additional security provided to support the guarantee

3. Assignment Rights: Provisions governing the right to assign or transfer the guarantee

4. Representations and Warranties: Additional declarations and assurances from the guarantor regarding their capacity and authority

5. Governing Law and Jurisdiction: Explicit choice of law and jurisdiction provisions where cross-border elements exist

What schedules should be included in a Promissory Note Personal Guarantee Language?

1. Schedule 1: Guaranteed Obligations: Detailed itemization of the specific obligations being guaranteed

2. Schedule 2: Payment Schedule: Detailed payment terms if payments are to be made in installments

3. Schedule 3: Security Details: Specification of any associated security or collateral supporting the guarantee

4. Schedule 4: Demand Form: Pro-forma demand notice template for calling upon the guarantee

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

Jurisdiction

England and Wales

Publisher

Genie AI

Document Type

Promissory Note

Sector

Banking

Cost

Free to use

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