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Guarantee Agreement for New Zealand

Guarantee Agreement Template for New Zealand

A Guarantee Agreement under New Zealand law is a legally binding document where one party (the guarantor) agrees to be responsible for the debts, obligations, or performance commitments of another party (the principal debtor) to a third party (the creditor/beneficiary). The agreement must comply with New Zealand contract law requirements, including the Contract and Commercial Law Act 2017 and, where applicable, the Credit Contracts and Consumer Finance Act 2003. It establishes the scope of the guarantee, conditions for enforcement, and the rights and obligations of all parties involved, while incorporating specific provisions required under New Zealand jurisdiction.

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What is a Guarantee Agreement?

A Guarantee Agreement is a crucial legal instrument in New Zealand business and financial transactions, used when one party needs to provide security for another's obligations. This document is essential in various contexts, from securing business loans to supporting commercial leases or construction contracts. The agreement must comply with New Zealand legal requirements and typically includes detailed provisions about the guaranteed obligations, enforcement mechanisms, and the extent of the guarantor's liability. Common scenarios for using this document include parent companies guaranteeing subsidiaries' obligations, directors guaranteeing company debts, or third parties providing guarantees for loan facilities. The document needs to be carefully drafted to ensure enforceability under New Zealand law and to clearly define the rights and obligations of all parties involved.

What sections should be included in a Guarantee Agreement?

1. Parties: Identifies the guarantor, the creditor (beneficiary of the guarantee), and the principal debtor

2. Background: Sets out the context of the guarantee, including reference to the principal debt or obligation being guaranteed

3. Definitions: Defines key terms used throughout the agreement

4. Guarantee and Indemnity: Core section establishing the guarantee obligations and indemnity provisions

5. Extent of Liability: Defines the scope and limitations of the guarantor's liability

6. Nature of Guarantee: Specifies whether the guarantee is continuing, irrevocable, and/or unconditional

7. Payment Obligations: Details when and how payments must be made under the guarantee

8. Representations and Warranties: Guarantor's confirmations about their capacity and authority to enter into the guarantee

9. Protection of Rights: Preserves the creditor's rights and remedies under the guarantee

10. Enforcement: Procedures and circumstances for enforcing the guarantee

11. Costs and Indemnities: Allocation of costs and expenses related to the guarantee

12. Notices: Requirements for giving notices under the agreement

13. General Provisions: Standard boilerplate clauses including governing law, jurisdiction, and amendment procedures

What sections are optional to include in a Guarantee Agreement?

1. Security: Include when the guarantee is secured by specific assets or property

2. Multiple Guarantors: Include when there is more than one guarantor, defining joint and several liability

3. Limit of Liability: Include when the guarantee is capped at a specific amount

4. Release and Discharge: Include when specific conditions for releasing the guarantor need to be detailed

5. Assignment: Include when the rights under the guarantee need to be transferable

6. Priority Arrangements: Include when there are multiple guarantees or security interests that need to be ranked

7. Consumer Protection Provisions: Include when the guarantee relates to a consumer credit contract

What schedules should be included in a Guarantee Agreement?

1. Schedule 1 - Guaranteed Obligations: Detailed description of the obligations being guaranteed

2. Schedule 2 - Principal Agreement: Copy or summary of the main agreement giving rise to the guaranteed obligations

3. Schedule 3 - Security Details: Details of any security provided in support of the guarantee

4. Schedule 4 - Guarantor Information: Key information about the guarantor including contact details and notice addresses

5. Appendix A - Form of Demand: Template form for making a demand under the guarantee

6. Appendix B - Compliance Certificate: Template for periodic confirmation of compliance with guarantee terms if required

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

New Zealand

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions






























Clauses































Relevant Industries

Banking and Financial Services

Real Estate and Property

Construction and Infrastructure

Manufacturing

Retail and Commerce

Professional Services

Technology and Software

Energy and Utilities

Agriculture and Primary Industries

Education

Healthcare

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Commercial

Credit Control

Corporate Services

Business Development

Operations

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Commercial Director

Credit Manager

Risk Manager

Company Secretary

Treasury Manager

Contracts Manager

Commercial Manager

Corporate Lawyer

Banking Relationship Manager

Financial Controller

Business Development Manager

Compliance Officer

Industries







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