Practical tips for drafting, reviewing and negotiating guarantees in financing transactions

This guidance note provides practical tips to assist legal practitioners when drafting, reviewing or negotiating guarantees in the course of advising clients. The practical tips include those relating to:

• • applicable principles for the guarantee to be binding;
• • how to draft a guarantee that will be construed as a deed;
• • reviewing a guarantee’s compliance with the Banking Code of Practice; and
• • drafting effective suspension of right of set-off clauses.

The guidance note also contains a selection of other relevant considerations for drafting, reviewing and negotiating guarantees. Examples from case law are provided to aid legal practitioners’ understanding in terms of applying the practical tips.

See Practical tips for drafting, reviewing and negotiating guarantees in financing transactions.

Practical tips for drafting Indemnity clauses

This guidance note provides some practical tips to assist legal practitioners when drafting indemnity clauses. Example wording is provided to aid legal practitioners’ understanding in terms of applying the practical tips.

The practical tips include those relating to:

• • drafting indemnities to change or expand the position at law; considerations include causation, foreseeability and remoteness;
• • the necessary step of analysing the financing transaction, identifying risk that may arise from the transaction, and listing potential losses that may result as a consequence;
• • how to draft indemnity wording so that the indemnity provisions are as clear as possible to avoid any disputes as to interpretation and construction; and
• • whether to use words and terms such as “make good”, “compensate” and “reimburse” instead of “hold harmless”.

See Practical tips for drafting indemnity clauses.