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A Guarantee Agreement is a binding contract where someone (the guarantor) promises to pay off a debt or fulfill obligations if the main borrower fails to do so. In Nigeria, these agreements play a vital role in securing loans, business deals, and major transactions under the Contract Laws of the Federation.

Banks and lenders commonly use guarantee agreements to reduce their risk when extending credit, especially for business loans and mortgages. The agreement must clearly state the guaranteed amount, payment terms, and conditions that trigger the guarantor's responsibility. Under Nigerian law, both parties must sign the document in the presence of witnesses to make it legally enforceable.

Use a Guarantee Agreement when extending credit or making significant business deals where you need extra security beyond the primary borrower's promise to pay. This legal tool proves especially valuable for Nigerian banks issuing large loans, property developers seeking construction financing, or businesses entering major supply contracts.

The agreement becomes essential when dealing with new business partners, companies with limited credit history, or high-value transactions that exceed standard risk thresholds. Nigerian courts consistently enforce these agreements, making them powerful protection for lenders, suppliers, and business owners who need a backup plan if the main party defaults on their obligations.

• Personal Guarantee Promissory Note: Combines a personal guarantee with a written promise to pay, commonly used in business loans and private lending
• Guarantor Indemnity Agreement: Offers broader protection by requiring the guarantor to cover all losses, not just the primary debt
• Guarantee Rental Agreement: Specifically designed for rental properties, ensuring rent payment and property maintenance obligations
• Personal Guarantee Letter: A simpler, letter-format guarantee often used for smaller transactions or supplier relationships
• Guarantor Tenancy Agreement: Focuses on residential tenancies, making a third party responsible for rent and tenant obligations

• Banks and Financial Institutions: Primary users who require Guarantee Agreements when issuing loans, mortgages, or credit facilities to manage lending risks
• Corporate Guarantors: Large companies that guarantee loans for their subsidiaries or business partners to facilitate growth and transactions
• Individual Guarantors: People who personally guarantee business loans, often company directors or wealthy individuals backing smaller enterprises
• Legal Practitioners: Draft and review agreements to ensure compliance with Nigerian banking and contract laws
• Property Owners: Request guarantees from tenants or businesses leasing commercial spaces to secure rental income

• Identify Parties: Gather full legal names, addresses, and registration details of the guarantor, primary debtor, and creditor
• Define Obligations: Document the exact amount, duration, and scope of the guaranteed debt or obligations
• Payment Terms: Specify payment schedules, interest rates, and conditions that trigger the guarantee
• Supporting Documents: Collect proof of identity, financial statements, and any relevant loan agreements
• Witness Details: Arrange for two witnesses as required by Nigerian law for valid execution
• Use Our Platform: Generate a legally-sound Guarantee Agreement that automatically includes all required elements and local compliance requirements

• Party Details: Complete legal names, addresses, and contact information of guarantor, creditor, and primary debtor
• Guarantee Scope: Clear description of guaranteed obligations, including specific amounts and duration
• Trigger Events: Precise conditions that activate the guarantor's obligations to pay
• Payment Terms: Detailed payment mechanisms, deadlines, and consequences of default
• Witness Provisions: Space for two witness signatures as required by Nigerian law
• Governing Law: Statement confirming Nigerian law governs the agreement
• Termination Clause: Conditions for ending or modifying the guarantee
• Template Assurance: Our platform automatically includes all these essential elements in every generated agreement

A Guarantee Agreement differs significantly from a Bank Guarantee. While both provide financial security, they serve distinct purposes in Nigerian business transactions.

• Nature of Obligation: A Guarantee Agreement creates a three-party relationship where a guarantor promises to fulfill another's obligations, while a Bank Guarantee is a direct promise from a bank to pay a specific amount
• Issuing Party: Guarantee Agreements can be issued by individuals or companies, but Bank Guarantees must come from licensed financial institutions
• Payment Trigger: Bank Guarantees typically offer immediate payment upon demand, while Guarantee Agreements often require proof of default
• Cost Structure: Bank Guarantees involve upfront fees and commission charges, whereas Guarantee Agreements usually don't carry direct costs
• Legal Enforcement: Bank Guarantees are generally easier to enforce under Nigerian banking laws, offering quicker recovery than standard Guarantee Agreements