Personal Guarantee Letter

LETTER OF PERSONAL GUARANTEE Date: [guarantee_date] To, [creditor_name] [creditor_address] Subject: Personal guarantee in respect of the obligations of [principal_debtor] Sir/Madam, 1. I, [guarantor_name], residing at [guarantor_address] (the "Guarantor"), am acquainted with [principal_debtor] (the "Principal Debtor"). 2. THE OBLIGATION GUARANTEED In consideration of your agreeing to extend credit or facilities to the Principal Debtor, I hereby guarantee the due performance of the following obligation: [obligation_guaranteed] 3. NATURE OF THE GUARANTEE 3.1 This is a guarantee within the meaning of Section 126 of the Indian Contract Act, 1872. 3.2 My liability as Guarantor is CO-EXTENSIVE with that of the Principal Debtor, in accordance with Section 128 of the said Act. You are entitled to proceed against me without first exhausting your remedies against the Principal Debtor, and without first realising any security you may hold. 3.3 My liability under this guarantee shall not exceed Rs. [guarantee_amount], together with interest and costs. 4. DURATION This guarantee shall remain in force [guarantee_duration], and shall continue notwithstanding any indulgence, time or forbearance granted to the Principal Debtor. 5. CONTINUING GUARANTEE This is a CONTINUING GUARANTEE and extends to the whole of the obligation guaranteed. It shall not be discharged by any intermediate payment or settlement of account, and shall remain in force until the obligation is discharged in full or until validly revoked in accordance with Section 130 of the Indian Contract Act, 1872. 6. UNDERTAKINGS OF THE GUARANTOR 6.1 I undertake to pay on demand any amount that becomes due and remains unpaid by the Principal Debtor. 6.2 I undertake to inform you promptly of any material change in my financial position or in my address. 6.3 I confirm that I have satisfied myself as to the circumstances of the Principal Debtor and have not relied on any representation by you. 7. DECLARATIONS I declare that I am of sound mind and legally competent; that I am giving this guarantee voluntarily and without coercion, misrepresentation or undue influence; that I am solvent and capable of meeting the liability undertaken; and that I have read and understood the contents of this guarantee. Yours faithfully, [guarantor_name] GUARANTOR [guarantor_address] WITNESSES 1. Name: ______________________ Signature: ______________ 2. Name: ______________________ Signature: ______________ BEFORE YOU SIGN — READ THIS CAREFULLY A guarantee is not a formality, and it is not a character reference. It is a legally enforceable promise to pay another person's debt. - Your liability is CO-EXTENSIVE with the borrower's. The creditor can come to you FIRST, without suing the borrower and without selling any security. - A default by the borrower affects YOUR credit record, and a guaranteed obligation is generally counted against your own borrowing capacity. - A continuing guarantee may cover future transactions, not just the one in front of you today. - Under Section 133 of the Indian Contract Act, 1872, a variance in the terms of the contract between the creditor and the borrower, made without the surety's consent, discharges the surety as to transactions after the variance. Under Section 134 the surety is discharged where the creditor releases the borrower. These protections are real but narrow — do not rely on them as an escape route. Give a guarantee only for an amount you could actually pay yourself, and only where you genuinely understand the underlying obligation.