Limited Suretyship – Time & Amount

LIMITED SURETYSHIP

Time and Amount

Summary A Limited Guarantee may be used where a debt is owed or may in the future be owed someone, and additional security is required in the form of another person accepting personal liability for the debt. This document limits the surety’s liability to the amount agreed in the suretyship, with the suretyship obligation ending on an agreed termination date.

We also have other Limited Guarantees available, limiting the payment obligation in terms of: amount & cause of debt; amount only; time (expiry date); or cause of debt.

Why do I need a Suretyship? A Guarantee provides a supplier or creditor with additional security. If the customer or debtor defaults, the creditor may use the suretyship to demand payment from the surety. If your business has customers or debtors that are likely to owe money, for example the provision of goods and services on credit, then a Suretyship may be used to reduce the risk of non-payment. Particularly if your customers or debtors are legal entities such as companies or trusts, where the directors, shareholders or trustees can be asked to sign personally guarantee the entity’s debt. But it can also be used by someone standing surety for their spouse, parent, child, friend or partner.

What does the Suretyship look like? This template suretyship can be printed onto three pages.

What do you need to do to use a Guarantee?

• Read the sample suretyship document to ensure that it suits your requirements. Make changes as required.
• Complete the relevant details, add more sureties if needed, and get the surety or sureties to sign.

This is a limited payment guarantee. We also have an Unlimited Suretyship if you need the guarantors to sign an unlimited payment undertaking.

A specialist’s advice should be sought, specifically if the underlying debt is subject to the National Credit Act 34 of 2005.

Also viewed: Letters of Demand

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