Guaranty Agreement Template for Hong Kong

The Guaranty Agreement is a crucial security document in Hong Kong's commercial and financial landscape, commonly used to provide additional comfort to creditors in various transactions. This document is essential when a party requires a third-party guarantee to support obligations such as loan repayments, lease commitments, or performance obligations. The agreement must comply with Hong Kong legal requirements and typically includes comprehensive provisions covering the nature and extent of the guarantee, enforcement mechanisms, and protections for all parties. It's particularly relevant in banking transactions, corporate finance, real estate dealings, and general commercial arrangements where credit support is required. The Guaranty Agreement can be used for both corporate and individual guarantors, though additional protections may be required when individuals are involved.

1. Parties: Identifies the guarantor, creditor, and principal debtor

2. Background: Describes the underlying transaction or obligation being guaranteed and the purpose of the guarantee

3. Definitions and Interpretation: Defines key terms and establishes interpretation rules for the agreement

4. Guarantee and Indemnity: Sets out the core guarantee obligations and associated indemnity provisions

5. Scope of Guarantee: Defines the extent of guaranteed obligations and any limitations

6. Continuing Security: Establishes the guarantee as a continuing security until full discharge

7. Guarantor's Representations and Warranties: Contains guarantor's confirmations about capacity and authority to enter into the guarantee

8. Preservation of Rights: Protects creditor's rights in various circumstances including debtor insolvency

9. Payments: Specifies payment obligations, timing, and method

10. Costs and Expenses: Allocates responsibility for costs related to the guarantee

11. Notices: Sets out how formal communications between parties should be made

12. Assignment and Transfer: Governs the ability to transfer rights under the guarantee

13. Governing Law and Jurisdiction: Specifies Hong Kong law as governing law and jurisdiction for disputes