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Letter Of Guarantee For Loan Template for Switzerland

A Letter of Guarantee for Loan under Swiss law is a formal undertaking by a guarantor to secure the obligations of a debtor to a creditor. The document must comply with strict Swiss legal requirements, including written form and maximum amount specification under the Swiss Code of Obligations (Articles 492-512). It requires proper authentication and, in cases where the guarantor is married and the amount exceeds CHF 1,000, spousal consent. The document establishes the scope of the guarantee, payment conditions, and the specific circumstances under which the guarantee can be called upon.

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What is a Letter Of Guarantee For Loan?

A Letter of Guarantee for Loan is a crucial document in Swiss financial transactions where a third party (guarantor) provides security for another party's loan obligations. This document type is commonly used in business financing, real estate transactions, and corporate lending scenarios. Under Swiss law, it must meet specific formal requirements including written form, maximum amount specification, and authentication. The letter typically details the guaranteed amount, duration, conditions for calling the guarantee, and release provisions. When drafting a Letter of Guarantee for Loan, particular attention must be paid to Swiss legal requirements, including spousal consent for married guarantors (for amounts exceeding CHF 1,000) and specific formalities under the Swiss Code of Obligations. The document serves as a risk mitigation tool for creditors while providing clear parameters for the guarantor's liability.

What sections should be included in a Letter Of Guarantee For Loan?

1. Identification of Parties: Full legal names and addresses of the Guarantor, Creditor (Beneficiary), and the Primary Debtor

2. Reference to Primary Loan: Details of the main loan agreement including date, parties, and amount

3. Guarantee Declaration: Clear and explicit statement of guarantee in accordance with Swiss law requirements

4. Scope of Guarantee: Specific amount or maximum limit of the guarantee as required by Article 493 CO

5. Duration of Guarantee: Term of the guarantee and any conditions for expiry

6. Payment Terms: Conditions and process for demanding payment under the guarantee

7. Guarantor's Representations: Confirmation of legal capacity and authority to provide the guarantee

8. Governing Law and Jurisdiction: Explicit statement of Swiss law governance and jurisdiction

9. Date and Signature: Formal execution requirements including authenticated signature as per Swiss law

What sections are optional to include in a Letter Of Guarantee For Loan?

1. Multiple Guarantors Clause: Required when there is more than one guarantor, specifying joint and several liability

2. Spouse Consent: Required under Swiss law when the guarantor is married and the guarantee amount exceeds CHF 1,000

3. Currency Provisions: Needed when the guarantee is in a different currency from the primary loan

4. Bank Details: Required when specific payment arrangements need to be documented

5. Corporate Authorization: Required when the guarantor is a corporate entity, including reference to board approvals

6. Release Conditions: Optional terms specifying when the guarantor may be released from obligations

7. Assignment Restrictions: Optional provisions regarding transfer or assignment of the guarantee

What schedules should be included in a Letter Of Guarantee For Loan?

1. Copy of Primary Loan Agreement: Attached to establish clear reference to the guaranteed obligation

2. Corporate Authorization Documents: Required for corporate guarantors, including board resolutions or powers of attorney

3. Spouse Consent Form: Required when guarantee amount exceeds CHF 1,000 and guarantor is married

4. Asset Schedule: Optional schedule listing specific assets securing the guarantee, if applicable

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

Jurisdiction

Switzerland

Document Type

Bank Guarantee

Sector

Banking

Cost

Free to use

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