Massachusetts Guaranty of Promissory Note by Individual — Corporate Borrower is a legal document that outlines the obligations and responsibilities of an individual guarantor towards a promissory note taken by a corporate borrower. This document is applicable in the state of Massachusetts and is used to secure the rights of the lender in case of default or non-payment by the borrower. The guaranty is characterized by the guarantee provided by the individual, who acts as a backup for the corporate borrower. By signing this agreement, the guarantor agrees to assume liability for the debt owed by the borrower and promises to pay off the remaining balance in case of default. This document includes several key provisions, including: 1. Identification: The document begins by clearly identifying the individual guarantor and the corporate borrower. This includes their full legal names and addresses. 2. Recitals: The document generally contains a section that sets out the background and purpose of the guaranty, along with the underlying promissory note. It explains the reason for the guarantor's involvement and the terms of the loan. 3. Guarantor's Obligations: The guaranty explicitly lays out the obligations and responsibilities of the guarantor. This includes the promise to pay the debt owed by the borrower, including principal, interest, and other related costs. 4. Waiver of Rights: The guarantor typically waives various rights, such as the right to demand payment from the borrower before paying the debt, the right to receive notice of default, and the right to participate in any recourse against the borrower. 5. Indemnification: The guarantor agrees to indemnify the lender for any costs, expenses, or losses incurred due to the borrower's default or non-payment, including reasonable attorney fees. 6. Governing Law: This provision states that the laws of the state of Massachusetts govern the interpretation, enforcement, and validity of the guaranty. Different types or variations of the Massachusetts Guaranty of Promissory Note by Individual — Corporate Borrower may exist, depending on specific circumstances or customization required by the parties involved. Some variations could include provisions related to collateral, personal guarantees, or additional rights and responsibilities of the guarantor. It is important to note that legal documents should always be customized to meet the specific needs and requirements of the parties involved. Consulting with a legal professional is highly recommended ensuring the document accurately reflects the intentions and protects the interests of all parties involved.
Massachusetts Guaranty of Promissory Note by Individual - Corporate Borrower
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When a personal guarantee is accompanied with a promissory note, a personal guarantee acts like collateral. The asset (promissory note) is protected by the collateral (the guarantor's promise to pay, and the ability to sue the guarantor personally for noncompliance with the terms of the promissory note).
Personal Guarantee: Taking Responsibility A promissory note alone may not be enough to secure the loan your business needs. That's why your promissory note could include a personal guarantee. Since a promissory note is basically just an IOU, a lender will want some kind of collateral to secure the loan.
However, in jurisdictions where promissory notes are commonplace, the company (called the payee or lender) can ask one of its debtors (called the maker, borrower or payor) to accept a promissory note, whereby the maker signs a legally binding agreement to honour the amount established in the promissory note (usually,
In the commercial lending context, a guaranty is an agreement made by a third party -- often the principal or principals of the commercial borrower -- to satisfy the payment obligations of the borrower upon an event of default (i.e., payment delinquency by the primary obligor/borrower).5 The guaranty is ordinarily
A guarantor is an individual who signs a loan or lease document in addition to the primary borrower. If the primary borrower defaults on the obligation, the guarantor will step in and pay for the debt. Guarantors are sometimes used in rental agreements, on student loans, with mortgages and auto loans.
Guarantor of payment is a person who guarantees guarantees payment of a negotiable instrument when it is due without the holder first seeking payment from another party. A guarantor of payment is liable only if payment guaranteed or equivalent words are specifically written on the instrument.
In a commercial setting, a guaranty is typically the promise of an owner or officer of a corporate entity to pay the debt of that corporate entity should it default on its obligation.
A loan guaranty is a legal document that is essentially an insurance policy that protects the lender in case the borrower defaults on their loan. The company will insure your company's debt to protect you from loss if they are unable to repay your loans, but it will come at a cost.
A personal guarantee is a provision a lender puts in a business loan agreement that requires owners to be personally responsible for their company's debt in case of default. Lenders often ask for personal guarantees because they have concerns over the credit history, age or financial stability of your business.
The person or entity that guarantees the borrower's debt is called a guarantor. A guarantor is one whose promise 'is collateral to a primary or principal obligation on the part of another and which binds the obligor to performance in the event of nonperformance by such other, the latter being bound to perform