A guaranty is a contract under which one person agrees to pay a debt or perform a duty if the other person who is bound to pay the debt or perform the duty fails to do so. A guaranty of the payment of a debt is different from a guaranty of the collection of the debt. A guaranty of payment is absolute while a guaranty of collection is conditional.
The Iowa Guaranty of Collection of Promissory Note is a legal agreement that provides a guarantee for the collection of a promissory note. A promissory note is a written document in which one party, known as the mayor, promises to pay a specific sum of money to another party, known as the payee, on a predetermined date or upon request. In Iowa, there are several types of Guaranty of Collection of Promissory Note: 1. Individual Guaranty: This type of guaranty is between an individual and a creditor, where the individual agrees to guarantee the collection of the promissory note in case the mayor defaults on payment. 2. Corporate Guaranty: This type of guaranty involves a corporation guaranteeing the collection of a promissory note. The corporation acts as a separate legal entity, assuming the liability for the mayor's debt. 3. Joint and Several guaranties: This guaranty involves multiple parties guaranteeing the collection of the promissory note. Each guarantor is individually responsible for the full payment of the debt, allowing the creditor to seek recovery from any or all guarantors. The Iowa Guaranty of Collection of Promissory Note includes important terms and clauses, such as: 1. Description of Parties: The agreement identifies the parties involved, including the creditor, payee, mayor, and guarantor(s). 2. Promissory Note Details: The specific details of the promissory note are outlined, including the principal amount, interest rate, payment terms, and due dates. 3. Guarantor's Obligations: The guarantor agrees to promptly pay the creditor the full amount of the promissory note if the mayor defaults on payment or fails to meet the agreed terms. 4. Notice: The agreement may include provisions for the creditor to give written notice to the guarantor in case of default by the mayor. 5. Release of Guarantor: The guarantor's obligations under the guaranty may be released if certain conditions are met, such as payment in full by the mayor or a specified time period passing without default. 6. Governing Law: The agreement will specify that it is governed by Iowa law and any disputes will be resolved in a court of Iowa. It is crucial to consult with a qualified attorney to draft, review, or modify the Iowa Guaranty of Collection of Promissory Note to ensure it adheres to legal requirements and serves the best interests of the parties involved.
