An agreement to assume responsibility for another person’s mortgage obligations in the event of that person’s default is known as a deed of guarantee. It is typically employed when a lender has concerns regarding a borrower’s capacity to repay mortgage installments and calls for the loan to be guaranteed by a second party, typically one who is in a stronger financial position.
Draft of Deed of Guarantee
This Agreement is executed on this………… day of ………… 2002, between M/s …………, having its office at ……., …………….., ………….., ……………….., being represented through Sh. ………… , who is duly constituted attorney (hereinafter referred to as the party of the “Creditor” for the sake of convenience), which expression shall be deemed to include their assigns, successors and attorneys and Sh………. S/o……………….. R/o………….
(hereinafter referred to as the “Borrower” for the sake of convenience), which expression shall be deemed to include their assigns, successors, attorneys and legal heir and Sh. ……………….
S/o……………….. R/o……., …………….., ………….., ……………….., (hereinafter referred to as the “Guarantors” for the sake of convenience) which expression shall be deemed to include their assigns, successors, attorneys and legal heir.
Whereas the Creditor has promulgated a Car Financing Scheme for its employees, thereby, granting a financial assistance to its employees for the purchase of a Car.
And whereas in consideration of the Creditor agreed to grant financial assistance to the Borrower and at the request of the Guarantors not to require immediate payment of any amount due from the Borrower and in consideration of any sums, which are being paid every month by the Creditor to the Borrower from time to time, the Guarantors has agreed to guarantee payment of all amounts due by the Borrower to the Creditor subject to the terms and conditions set forth and the party of the Creditor has agreed thereto.
THIS AGREEMENT WITNESSETH THAT in consideration of the premises, the Borrower and the Guarantors do hereby agreed to indemnify the Creditor against all losses and to pay and satisfy the Creditor on demand the amount outstanding, due and payable to it alongwith interest as prescribed in the Car Loan Agreement from the date of the execution/demand made by the party of the Creditor.
If the Borrower for whatever reasons, leave the employment of the Creditor before three years of the execution of this deed, he shall be liable to pay the monies advanced by the Borrower from time to time alongwith interest as prescribed in the Car Loan Agreement, which shall also be read as part of this Deed.
Provided that the total liability ultimately enforceable against the Borrower and Guarantors under this agreement shall not exceed a sum of Rs………………….. ( ……………………) alongwith interest as prescribed in the Car Loan Agreement thereon from the date of demand claimed by the Creditor upto the payment made by the Borrower and Guarantors alongwith expenses, charges etc. in writing to the Creditor.
The aforesaid guarantee shall remain a continuing one unless the Borrower and Guarantors gives a fresh an irrevocable guarantee other than the one given by her.
The liabilities of the Borrower and Guarantors shall be construed to be joint and several and the said guarantee shall be a continuing one notwithstanding the death of the Borrower and Guarantors and shall be binding upon their legal representatives and the estates of the deceased Borrower and Guarantors.
Any amount settled between the Creditor and the Borrower or admitted by him shall be the conclusive admitted evidence of the amount accepted by the Borrower and Guarantors and would be the balance amount, thereby, appearing due from the Borrower to the Creditor.
The Borrower hereby undertakes and agrees to give two sound sureties, which are acceptable to the Creditor in its own discretion in the sum of Rs. …………………… (Words) payable with interest as prescribed in the Car Loan Agreement.
The Borrower and Guarantors hereby declare that he/she in all times be bound by such acknowledgement of liability given by the Borrower from time to time.
IN WITNESS WHEREOF the Borrower, the Guarantors and the Creditor have hereunto affixed their hands the date and year above mentioned.
CREDITOR BORROWER GUARANTORS
WITNESSES:
1.
2.
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