Let's Get Surety
#107 Ironclad Personal Guarantee... Or Is It?
Feb 27, 2024
Exploring the pitfalls of negotiating personal guarantees in the construction industry, the podcast discusses the complexities and implications of enforceability. The importance of clear documentation, understanding co-obligors' roles, and assessing contract risks are highlighted to avoid legal surprises and protect against liabilities.
31:47
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Quick takeaways
- Personal guarantees can be unenforceable if not clearly defined and understood by all parties involved in the agreement.
- Personal guarantees serve as crucial security measures for material suppliers in unbonded projects, ensuring payment obligations are met.
Deep dives
Personal Guarantee in Business Transactions
Personal guarantees are common in business transactions, particularly in the construction industry. They often appear in credit agreements between material and equipment suppliers and new customers. These agreements typically hold individuals accountable for payment obligations. Such guarantees present a significant risk, especially when the language is not clearly understood by those signing the documents. Personal guarantees can provide security for suppliers, especially in unbonded projects, where suppliers may require these guarantees to ensure payment.
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