… you are willing to guarantee the loan taken out by another organization or person
… you have granted a loan and another person or organization guarantees its repayment
… you have taken out a loan and another person or organization is willing to guarantee its repayment
Under this (simple) surety agreement, a person or organization agrees to guarantee the repayment of a loan taken out by another person or organization.
The surety agreement is entered into between the guarantor – who is not the same person as the borrower – and the lender. There usually are separate arrangements in place between the guarantor and the borrower.
Unlike under a joint surety, the lender may not enforce a simple surety just because the borrower is in default and has been unsuccessfully admonished. Rather, the lender can only pursue the guarantor in a narrowly defined set of circumstances which broadly entail that the borrower clearly will not reimburse the loan.
If the guarantor is a private person, there are additional form requirements beyond a surety amount of CHF 2,000 and, if he/she is married or has a registered partner, the spouse or partner must give his/her consent in writing.
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