Guarantee of contract debt OR Deed of guarantee of loan

Simple agreement where guarantor steps into guarantee payment of a debt. One party has money problems. The other party refuses credit or refuses to continue his own contractual obligations. Guarantor "rescues" the first party by guaranteeing payment. Applicable to any situation where money is owed. Optional new terms suggested.

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About this document

This is a professionally drawn, short agreement which identifies an original contract, then ties a new guarantor to it, to stand in the shoes of the debtor, should that be necessary.

The agreement provides an option for changed terms of payment should you so require. You could change any term in the original contract. For example, the debtor may agree to an increased rate of default interest, or the creditor to extended payments or a different schedule of work against which payments are made. (If you make a change which affects the obligations of the creditor or debtor, they must sign too. If that happens, no-one needs to sign as a deed.)


Nineteen year old entrepreneur borrows from friend of family to start new business. Loan requires monthly payments. Borrower fails to meet them. His father agrees to provide “after the event” guarantee. Lender is happy and son can carry on with his business. No change to terms of original agreement.


Website writer agrees to write website for new limited company. No guarantee in the contract. Before it is completed, client decides to add a great deal more work. Writer now worried about payment, so insists on directors of client company guaranteeing payment for the enlarged contract. This agreement would include adding a new schedule to the original agreement, by reference, and new schedule of payments.


Builder agrees to build a house against stage payments. When house up to first floor level, client fails to make a payment as required by the contract. Builder threatens to walk out and video the story for Facebook. Client persuades brother-in-law to give guarantee of the debt as instalments become due. Builder agrees to complete the contract.

The law in this document

There is no modern statutory law relating to guarantees. This document is based on contract common law.

Alternative documents

In these examples, the guarantee is for a loan or debt. If you are looking for a guarantee for performance rather than payment, look at Guarantee of contract performance.

Net Lawman offers other document templates related to new guarantees at Guarantees and Indemnities.

Agreement features and contents

The key benefit of using this document over adding a guarantee paragraph to the original contract is the simplicity of use. There is no need to edit and agree the original. That means less room for making a mistake and invalidating the original.

  • Can join one or more guarantors
  • Guarantee for all aspects of the original contract
  • Option to change the terms of original agreement
  • Option to limit the guarantee if necessary
  • Guarantor can be a business or individual (as a personal guarantee)
  • Suitable for any type of contract

This document was written by a solicitor for Net Lawman. It complies with current Indian law.

IN-LDGgti02 - Guarantee of contract debt OR Deed of guarantee of loan

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