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The Personal Guarantee On Promissory Note is a crucial financial security instrument used in South African commercial transactions when additional assurance is required for debt obligations. It is commonly employed in situations where a creditor requires extra security beyond the promissory note itself, particularly in business loans, commercial transactions, or investment arrangements. The document combines elements of both promissory notes (governed by the Bills of Exchange Act) and personal guarantees (requiring compliance with Section 6 of the General Law Amendment Act), creating a comprehensive security structure. It's especially relevant in scenarios involving business expansion, asset financing, or corporate lending where personal commitment from stakeholders or related parties is required to secure the underlying debt obligation.

1. Parties: Identification of the Guarantor, the Holder of the promissory note (Creditor), and the Maker of the promissory note (Principal Debtor)

2. Background: Context of the underlying promissory note, its basic terms, and the reason for the guarantee

3. Definitions: Definitions of key terms used in the guarantee, including 'Promissory Note', 'Principal Debt', 'Guaranteed Obligations', and other relevant terms

4. Guarantee: The core guarantee provisions, including the scope of the guarantee and the guarantor's undertaking to pay

5. Nature of Guarantee: Specifies that this is an unconditional, irrevocable, and continuing guarantee and suretyship

6. Duration and Extent: The term of the guarantee and the maximum amount guaranteed

7. Guarantor's Obligations: Detailed obligations of the guarantor, including payment terms and conditions

8. Preservation of Rights: Provisions ensuring the creditor's rights are preserved despite any changes to the underlying debt or circumstances

9. Waiver of Benefits: Explicit waiver of common law benefits available to sureties (such as beneficium ordinis seu excussionis and beneficium divisionis)

10. Representations and Warranties: Guarantor's confirmations regarding capacity, authority, and understanding of obligations

11. Costs and Expenses: Responsibility for legal and enforcement costs

12. Notices: Communication procedures and contact details for formal notices

13. General Provisions: Standard boilerplate clauses including governing law, jurisdiction, and entire agreement provisions