A bank demand addressed to a guarantor

At a glance

Read the guarantee and demand together with the underlying facility. A guarantor's liability cannot be assessed solely from being described as a director, relative or business partner.

Law and context

The Contract Act governs guarantee obligations within its scope. The instrument’s limit, continuing nature, variations, payments and any release can affect the analysis, while the lender’s recovery route has separate conditions.

Practical next step

Prepare the full guarantee, facility amendments, demand, account record and settlement communications. Identify the exact promise and alleged default for a prompt assessment.

Important qualifications

This page does not guarantee discharge or state that the lender must always exhaust another remedy first. Current law and the particular contract matter.

Document checklist

• Guarantee and facility
• Amendments
• Demand and account record
• Releases or settlement terms

Sources

• The Indian Contract Act, 1872 — 126-139
• The Recovery of Debts and Bankruptcy Act, 1993 — 19

General information. The appropriate course depends on the complete facts, documents and applicable law. Editorial process and website disclaimer.