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Guaranty With No Pledge

This document is a guaranty without collateral pledge that unconditionally guarantees performance of an agreement, including payment obligations, to the promisee. The guarantor assumes direct and primary liability, and the promisee can take action against the guarantor without first pursuing other parties. The guaranty is governed by the laws of the specified state and binds the guarantor and successors.

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58 views2 pages

Guaranty With No Pledge

This document is a guaranty without collateral pledge that unconditionally guarantees performance of an agreement, including payment obligations, to the promisee. The guarantor assumes direct and primary liability, and the promisee can take action against the guarantor without first pursuing other parties. The guaranty is governed by the laws of the specified state and binds the guarantor and successors.

Uploaded by

KnownUnknowns-X
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Guaranty without pledged collateral

FOR VALUE RECEIVED, receipt of which is hereby and herein acknowledged, and to induce
(the "Promisee") to enter into the Agreement dated _______________________
with _________________________________ (the "Guarantor"), executed and effective
simultaneously with the execution and effectiveness of this Guaranty, _______________
(the "Guarantor"), hereby unconditionally and absolutely guarantees to the Promisee the
performance by the Guarantor of each and every covenant, agreement and obligation of the
party or parties under the Agreement including, without limitation, the payment to the Promisee
(or, if applicable, his executors, administrators or personal or legal representatives or estate or
legatees) of all sums due under the Agreement at the time such sums shall be due and payable.

The obligation of Guarantor under this Guaranty shall be a direct and primary obligation, and the
Promisee shall not be required to exhaust any of the Promisee's rights or remedies against the
party or parties, or any Guarantor prior to making any demand on or invoking any of the
Promises rights and remedies against a Guarantor. In furtherance of the foregoing, Promisee
may proceed, at one time or successively and without notice to any Guarantor, against any
Guarantor, or against any one or more of them. In any action brought by Promisee against a
Guarantor under this Guaranty, no Guarantor shall be entitled to, and shall not, plead as a
defense that Promisee is not legally or equitably insolvent or is dissolved or liquidated, and each
Guarantor covenants and agrees to pay to the Promisee all costs and expenses (including
attorney's fees) incurred by Promisee in any such action.

This Guaranty and all rights, obligations and liabilities arising hereunder shall be
construed and enforced in accordance with the laws of the State of _________________

This Guaranty shall bind each Guarantor below and each Guarantor's respective successors
and assigns, and shall inure to the benefit of Promisee and Promisee's executors,
administrators, personal and legal representatives, and estate and legatees.

IN WITNESS WHEREOF, this Guaranty has been duly executed by the Guarantor(s) on

_________________________
Date

By:

_________________________ ____________________________
Guarantor Guarantor (if a second one)
Guaranty
Review List

This review list is provided to inform you about the document in question and to assist you in completing
it.

1. A Guaranty is similar to a Promissory Note because it creates a conditional obligation to pay a


debt. Proper accounting requires that the Guaranty be shown as a liability on the personal
financial statements of the Guarantor or Guarantors. In other words, this is a very serious
financial commitment and the Guarantor should be sure to seek business advice before
undertaking this kind of serious financial commitment and assure him or herself that the benefits
of the Agreement being guaranteed are worth the financial risk being taken by being a Guarantor
to this Agreement.

2. If you are the Promisee, or the recipient of the benefit of the Guarantor’s signature, and the
Guarantor is a corporation, make sure that the person signing the Guaranty is authorized by his
or her corporation to sign and that the Guaranty does not violate any provision in the corporation's
Articles of Incorporation or Bylaws.

3. The Promisee should understand that this guarantee is a “promise” not a guarantee of payment
under the original Agreement or under this guarantee by the Guarantor or Guarantors. A
Guaranty is only as good as the financial condition of the Guarantor except in those instances
under a guarantee when collateral is required in the form of a pledge of certain assets such as
real estate, stocks or bonds, or other liquid financial instruments. This is a standard guarantee
without a provision for collateral to be provided to secure the Guaranty.

4. As with all documents, laws vary from state to state and change over time. Before using this
document, have a lawyer review it before signing it.

5. In addition, if you are forced to seek collection under this Guaranty, your state laws may require
that certain actions first be taken against the party that created the original obligation, up to and
including filing a lawsuit. Consult an attorney if enforcement of the Guaranty becomes an issue.

6. The Promisee should keep the original Guaranty with the note or other instrument that is
guaranteed in a secure location such as a home safe and have copies made and stored,
preferably, with your attorney and/or accountant.

7. If you are in a business or situations of dealing with financially fragile or unstable entities, such as
with young adults or new companies, we strongly recommend you use this guaranty to back up
rent payments (perhaps by the parents of a student or a young adult), accounts payable to new
firms (by the principals), and other such situations. If you have forms “handy” when the initial
transaction is made, it is much easier to gain a signature.

8. Collections under Guaranties are often best made in small steps. First, consider reducing the
Guaranty to an agreed upon Promissory Note with interest and collection costs awarded to you if
not paid in the additional time you grant for extension (anything from 1 month to several years,
depending on your negotiating leverage). If not paid under these terms, seek a court order for
judgment under the Promissory Note. As a rule, you are well advised to employ a legal specialist
to do this; in this case a Collection Attorney. They are specialists in the field and will often
undertake the process on a contingency or percentage basis, if you desire that option.

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