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Guarantee Contract for Switzerland

Guarantee Contract Template for Switzerland

A Swiss law guarantee contract is a formal legal instrument where one party (the guarantor) undertakes to ensure the performance of an obligation owed by a third party (the principal debtor) to a beneficiary (creditor). Governed by the Swiss Code of Obligations, particularly Articles 492-512, this document must be in writing and specify a maximum liability amount. The document can take the form of either a dependent guarantee (B眉rgschaft) or an independent guarantee (Garantie), each with distinct legal implications and enforcement mechanisms under Swiss law.

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What is a Guarantee Contract?

The Guarantee Contract is a crucial instrument in Swiss commercial practice, commonly used to secure financial obligations, construction projects, and commercial transactions. Under Swiss law, guarantees must comply with strict formal requirements set out in the Swiss Code of Obligations, including written form and maximum amount specification. This document is particularly relevant when a third party needs to provide security for another party's obligations, whether in a corporate group structure, project finance, or general commercial context. The guarantee can be structured either as a dependent guarantee (B眉rgschaft) or an independent guarantee (Garantie), with the choice affecting the guarantor's defenses and the conditions for payment. The document typically includes detailed provisions on demand mechanics, representations, and enforcement procedures, all tailored to comply with Swiss legal requirements and commercial practice.

What sections should be included in a Guarantee Contract?

1. Parties: Identification of the Guarantor, the Beneficiary (Creditor), and reference to the Principal Debtor

2. Background: Context of the guarantee, reference to the underlying obligation being guaranteed

3. Definitions: Key terms used in the guarantee, including 'Guaranteed Obligations', 'Maximum Liability Amount', and 'Guarantee Period'

4. Guarantee: Core guarantee obligation, explicitly stating the maximum amount as required by Swiss law

5. Scope of Guarantee: Detailed description of the obligations covered by the guarantee

6. Independence and Primary Nature: Clarification whether this is an independent guarantee (Garantie) or a dependent guarantee (B眉rgschaft)

7. Demands and Payments: Process and requirements for making demands under the guarantee

8. Duration and Release: Term of the guarantee and conditions for release of the guarantor

9. Representations and Warranties: Guarantor's confirmations regarding capacity and authority

10. Governing Law and Jurisdiction: Confirmation of Swiss law governance and jurisdiction

What sections are optional to include in a Guarantee Contract?

1. Transfer and Assignment: Include if guarantee rights may be transferred or if assignment should be restricted

2. Counter-Indemnity: Include if the guarantor requires indemnification from the principal debtor

3. Multiple Guarantors: Include if there are multiple guarantors to address joint and several liability

4. Currency Provisions: Include if the guarantee involves foreign currency obligations

5. Tax Gross-Up: Include if payments under the guarantee may be subject to withholding tax

6. Communications: Include if specific notice requirements for demands or communications are needed

What schedules should be included in a Guarantee Contract?

1. Form of Demand: Template for making valid demands under the guarantee

2. Underlying Obligation: Copy or summary of the principal obligation being guaranteed

3. Guarantor Board Resolution: Evidence of corporate authority for corporate guarantors

4. Payment Details: Bank account and payment information for guarantee payments

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Switzerland

Document Type

Service Agreement

Cost

Free to use
Relevant legal definitions






























Clauses






























Relevant Industries

Banking & Financial Services

Construction & Real Estate

Manufacturing

International Trade

Retail

Infrastructure

Energy

Telecommunications

Professional Services

Insurance

Relevant Teams

Legal

Finance

Treasury

Risk Management

Corporate Finance

Commercial

Compliance

Credit Control

Company Secretariat

Operations

Relevant Roles

Legal Counsel

Chief Financial Officer

Treasury Manager

Risk Manager

Corporate Finance Director

Commercial Director

Contract Manager

Company Secretary

Credit Manager

Compliance Officer

General Counsel

Finance Director

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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