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- Guarantees and indemnities essentials
What is guaranteed, and whose obligations are guaranteed
Guarantees often guarantee all the obligations of the principal to the guaranteed party in relation to a specific transaction only. It can be:
- • an “all moneys” guarantee; or
- • a limited guarantee.
This guidance note explains a guarantee that is for a specific transaction, an “all moneys” guarantee, and a limited guarantee. It also provides drafting tips for an “all moneys” guarantee and a limited guarantee, in particular, a guarantee that is limited in amount.
A guarantee can cover the obligations of the borrower, but it can also cover the obligations of third parties. This guidance note explains both these scenarios.
Example wording for provisions in a guarantee is provided throughout this guidance note to aid legal practitioners’ understanding.
See What is guaranteed, and whose obligations are guaranteed.
