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A Guarantor Agreement (Bürgschaftsvertrag) creates a legally binding promise where one party agrees to pay another party's debts if they default. Under German Civil Code (BGB) sections 765-778, this contract makes the guarantor directly responsible for covering the main debtor's financial obligations to the creditor.

German banks and landlords commonly use these agreements when they need extra security for loans or rental contracts. The guarantor must be clearly named and sign the agreement in writing (Schriftform) to make it valid. Unlike some payment promises, a Guarantor Agreement stays valid even if the main debtor files for bankruptcy, giving creditors a reliable backup plan for debt collection.

Use a Guarantor Agreement when lending money or renting property to someone with limited credit history or financial means in Germany. Banks regularly require these agreements for student loans, where parents guarantee their children's debt obligations. Property owners often need them for young professionals or students renting their first apartment.

The agreement becomes especially valuable when dealing with startup businesses, where established companies or business partners guarantee loan obligations. German law (BGB) makes these agreements particularly effective for risk management since they remain enforceable even if the primary debtor faces financial difficulties. Consider using one anytime there's uncertainty about a borrower's ability to fulfill their financial commitments.

• Personal Guarantee Agreement: Individual guarantor accepts full liability for business or personal debts, commonly used in small business loans
• Parent Guarantee Agreement: Parents guarantee their children's financial obligations, typically for student housing or education loans
• Tenancy Agreement With Guarantor: Integrated rental contract that includes guarantor provisions for residential leases
• Rent Guarantee Agreement: Specific to rental payments, often used for commercial properties or high-value residential leases
• Lease Guaranty: Corporate guarantee structure common in commercial real estate, covering all lease obligations

• Banks and Financial Institutions: Act as creditors requiring guarantees for loans, mortgages, and business financing under German banking regulations
• Property Owners and Landlords: Request guarantors for rental agreements, especially with students or young professionals
• Parents or Family Members: Serve as personal guarantors for their children's rental contracts or student loans
• Business Owners: Provide personal guarantees for company loans or lease agreements
• Legal Professionals: Draft and review agreements to ensure compliance with BGB requirements and protect all parties' interests
• Corporate Guarantors: Established companies that guarantee obligations of subsidiaries or business partners

• Primary Debt Details: Document the exact amount, interest rates, and payment terms of the original obligation
• Identity Verification: Collect official ID documents and proof of address from both guarantor and debtor
• Financial Assessment: Gather guarantor's income statements, bank records, and asset documentation
• Legal Requirements: Ensure written form (Schriftform) compliance under German Civil Code
• Clear Terms: Specify guarantee duration, payment triggers, and enforcement conditions
• Signing Process: Plan for proper witnessing and notarization if required by law
• Document Storage: Prepare secure storage for original signed copies and supporting documentation

• Party Details: Full legal names, addresses, and identification of guarantor, debtor, and creditor
• Guarantee Scope: Clear description of guaranteed obligations and maximum liability amount
• Payment Terms: Specific conditions triggering guarantee and payment deadlines
• Duration Clause: Start date and termination conditions of the guarantee
• Written Form: Compliance with BGB §766 requiring written format (Schriftform)
• Governing Law: Express reference to German law and jurisdiction
• Severability: Standard salvatorische Klausel preserving validity if parts are invalid
• Signature Block: Designated spaces for all parties' signatures and dates

A Guarantor Agreement differs significantly from a Bond Issuance Agreement in German law, though both involve financial obligations. While a Bond Issuance Agreement creates a direct debt instrument between issuer and investors, a Guarantor Agreement establishes a secondary promise to pay someone else's debt.

• Legal Structure: Guarantor Agreements create a three-party relationship (creditor, debtor, guarantor), while Bond Issuances establish direct two-party obligations
• Risk Profile: Guarantor Agreements activate only upon default of the primary debtor; Bond Issuances create immediate payment obligations
• Enforcement Order: Under German law, creditors must first pursue the primary debtor before claiming against a guarantor, unlike bonds where investors can claim directly
• Documentation Requirements: Guarantor Agreements need simple written form (Schriftform), while Bond Issuances require extensive prospectus documentation and regulatory compliance