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Guarantor Indemnity Agreement

Guarantor Indemnity Agreement Template for New Zealand

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Key Requirements PROMPT example:

Guarantor Indemnity Agreement

"I need a Guarantor Indemnity Agreement for a commercial property lease where our parent company will act as guarantor for our subsidiary's lease obligations, with the agreement to commence from March 1, 2025, and include specific provisions for step-in rights."

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Document background
The Guarantor Indemnity Agreement is a crucial legal instrument in New Zealand's commercial and financial landscape, commonly used when additional security is required for loans, leases, or other financial obligations. This document type is particularly relevant when a creditor requires extra assurance beyond the principal debtor's commitment, typically in situations involving substantial loans, property transactions, or business financing. The agreement must comply with New Zealand's robust legal framework, including the Contract and Commercial Law Act 2017 and consumer protection legislation. A well-drafted Guarantor Indemnity Agreement will clearly outline the guarantor's obligations, include necessary consumer protections, and specify enforcement mechanisms, while ensuring all parties understand their rights and responsibilities under New Zealand law.
Suggested Sections

1. Parties: Identifies all parties to the agreement including the Creditor, Principal Debtor, and Guarantor(s)

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

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

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

5. Extent of Guarantee and Indemnity: Details the scope and limitations of the guarantor's obligations

6. Nature of Guarantee: Specifies that the guarantee is continuing, unconditional and irrevocable

7. Guarantor's Obligations: Detailed list of specific obligations and undertakings of the guarantor

8. Creditor's Rights: Sets out the rights of the creditor, including enforcement rights

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

10. Representations and Warranties: Guarantor's confirmations about their capacity and understanding

11. Default and Enforcement: Describes events of default and enforcement mechanisms

12. Costs and Indemnities: Addresses liability for costs and specific indemnities

13. General Provisions: Standard boilerplate clauses including notices, amendments, governing law

Optional Sections

1. Security Provisions: Include when specific assets are being provided as security for the guarantee

2. Multiple Guarantors: Additional provisions when there is more than one guarantor, including joint and several liability

3. Independent Legal Advice: Detailed acknowledgment of receiving independent legal advice, recommended for consumer guarantees

4. Limit of Liability: Include when the guarantee is to be limited to a specific amount or percentage

5. Priority Arrangements: Required when there are multiple creditors or security interests to be ranked

6. Assignment and Transfer: Detailed provisions for when rights under the guarantee may need to be assigned

7. Financial Covenants: Include when ongoing financial requirements are imposed on the guarantor

8. Release Provisions: Specific conditions under which the guarantor may be released from obligations

Suggested Schedules

1. Schedule 1 - Details of Principal Obligations: Details of the underlying debt or obligations being guaranteed

2. Schedule 2 - Security Details: Description of any security assets or arrangements

3. Schedule 3 - Guarantor Information: Detailed information about the guarantor(s) including contact details and relevant financial information

4. Schedule 4 - Payment Terms: Specific payment arrangements and schedules

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

6. Appendix B - Certificate of Independent Legal Advice: Standard form certificate to be signed by the guarantor's legal advisor

7. Appendix C - Deed of Priority: If required, sets out priority arrangements with other creditors

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant Industries

Banking & Financial Services

Real Estate & Property

Construction

Commercial Lending

Small Business

Corporate Finance

Retail

Manufacturing

Professional Services

Agriculture

Relevant Teams

Legal

Finance

Credit

Risk Management

Compliance

Commercial

Corporate Services

Business Development

Operations

Relevant Roles

Chief Financial Officer

Finance Director

Credit Manager

Risk Manager

Legal Counsel

Commercial Lawyer

Lending Manager

Credit Analyst

Relationship Manager

Compliance Officer

Company Secretary

Business Development Manager

Contract Administrator

Financial Controller

Industries
Contract and Commercial Law Act 2017: This is the primary legislation governing contract formation, enforcement, and remedies in New Zealand. It's crucial for the basic structure and enforceability of the guarantee agreement.
Property Law Act 2007: Relevant for guarantees related to property transactions and mortgage-backed securities, including provisions about the form and content of guarantees relating to land transactions.
Credit Contracts and Consumer Finance Act 2003: Contains specific provisions regarding guarantees in consumer credit contracts, including disclosure requirements and protections for guarantors.
Fair Trading Act 1986: Ensures fair trading practices and prohibits misleading and deceptive conduct in trade, which applies to the formation and execution of guarantee agreements.
Financial Markets Conduct Act 2013: Relevant when the guarantee is part of a wider financial arrangement or investment scheme, ensuring proper disclosure and compliance with financial markets regulations.
Personal Property Securities Act 1999: Important when the guarantee involves personal property as security, governing the registration and enforcement of security interests.
Contractual Mistakes Act 1977: Provides relief in cases where mistakes have been made in the formation of contracts, including guarantees and indemnities.
Illegal Contracts Act 1970: Determines the validity and enforceability of contracts that may be illegal or contrary to public policy.
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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