Document background
The Guarantor in Loan Agreement is a crucial document in Canadian lending practices, typically used when additional security is required for a loan beyond the primary borrower's creditworthiness. This agreement becomes necessary in various scenarios, such as business loans where personal guarantees from directors are required, real estate financing where family members may guarantee residential mortgages, or corporate financing where parent companies guarantee subsidiaries' obligations. The document must comply with both federal banking regulations and provincial contract laws, including specific requirements for written guarantees under provincial Statutes of Fraud. It outlines the guarantor's obligations, enforcement mechanisms, and any limitations on liability, while ensuring all parties' rights are protected under Canadian law.
