Surety Contract Research Articles

A kezességi szerződés szabályozása a román Polgári törvénykönyv rendszerében

The author of the following study presents the institution of surety as it is regulated in Romanian civil law. The notion of surety (in the sense of the person offering the guarantee) is presented, as well as the legal nature of the surety contract, and its defining characteristic of an accessory guarantee as well as the conclusion of the contract and the formal and material requirements for its validity. In the following, the author presents the various types of surety regulated in Romanian civil law. Regarding the effects of the surety contract the study presents the legal consequences specifically regulated in Romania, which arise when the debtor fails to respect his obligations. In the final part of the study, the reasons for the cessation of the effects of the surety contract, are presented, with special emphasis on the death of the surety (natural person), which, contrary to the apparent meaning of the legal text, does not result in the cancellation of any debt owed by the deceased surety in virtue of the surety contract. This debt shall remain due as part of the surety’s estate.

Uticaj prevare koja potiče od sajemca na punovažnost ugovora o jemstvu i prava jemca - žrtve prevare

In case a surety concludes a contract due to fraudulent acts of his co-surety, he may find himself in a rather unenviable position. Remedies for his protection are very limiting. Namely, third parties' fraud only exceptionally leads to the annulment of the contract: if the contracting party is guilty of fraud; or the contract is gratuitous, which is very questionable for surety contract. The chances for annulment are even fewer if we apply the rules of mistake: mistake as to the debtor solvency represents a mistake as to the motif which is only exceptionally legally relevant. Finally, the right to ask damages from co-surety can also be of limited nature: firstly, there is a risk that the damages cannot be compensated; secondly, an absurd situation may occur that the victim of the fraud cannot reject the contribution claim from the co-surety but he may later on ask damages from him.

NAMED AND UNNAMED KINDS OF PERSONAL ENSURING

The article deals with the named and unnamed special kinds of enforcement of the obligation. Special kinds of the fulfillment of an obligation ensuring are proposed to be considered as a means of protecting the rights of the creditor in contractual obligations, where the fulfillment of obligations caused by the debtor is due to the fulfillment of the obligation of the third (other than the debtor) of the surety, guarantor, joint or subsidiary debtor, insurer. Among the named kinds of securing the fulfillment of the obligation is investigated surety and warranty. Surety as a special kind of ensuring the fulfillment of the obligation means that in the event of a debtor breaking the obligation secured by it, the creditor’s property interests are met by a third party – guarantor. Surety arises exclusively on the basis of the concluded contract on surety. A surety contract may be concluded not only between the creditor and the surety, but also as a tripartite agreement between the creditor, the debtor and the surety, for example, when a surety contract is concluded as one of the part of the main contract. A surety agreement gives the right to thecreditor in the event of breach of a secured obligation to require the guarantor to fulfill the obligation incurred by the debtor. The surety is liable to the creditor so as a debtor, including the payment of principal debt, interests, penalty, damages, that is, he bears full responsibility for the debtor. As a rule, the surety and the debtor act as solidary debtors. The guarantee, as personal kind of ensuring the fulfillment of the obligation, protects the violated rights of the creditor by the way of enforcing the guarantor to bear responsibility for breaching the obligation by the debtor. Under guarantee, a bank, another financial institution, an insurance organization (guarantor) guarantees to the creditor (beneficiary) the fulfillment of the debtor (principal) of his duty. The guarantor independently is responsible to the creditor for violation of the obligation by the debtor. He is not a solidary debtor. The article considers the possibility of recognizing insurance as one of the unnamed to the research of insurance financial risks and insurance. Оf responsibility of the personal kinds of enforcement of the obligation fulfillment. This problem is given special attention. The author also proposes to refer to the unnamed types of enforcement of the obligation fulfillment the following: factoring – financing in the case of the right deviation to money claim, which legal structure has found its securing in Article 1077 of the Civil Code of Ukraine.

Precontractual duty to inform the surety

Sureties often claim that they have not been informed about the difficult financial situation of the principal debtor prior to the conclusion of the contract and that they have been the victims of a fraud. Usually, it is the debtor who is responsible for the fraud: he is interested in concealing or even improving his real financial situation. However, the surety contract is concluded between the surety and the creditor. Is the surety in a position to annul the contract if the deceit is practiced by a third party? On the other side, creditors (especially, banks) often possess the exact information about the financial capacity of the debtor: should they inform the surety about this? And what are the consequences if they do not? Can the surety ask for the annulment of the contract on the basis of creditor’s non-disclosure?

Predugovorna dužnost obaveštavanja jemaca

Sureties often claim that they have not been informed about the difficult financial situation of the principal debtor prior to the conclusion of the contract and that they have been the victims of a fraud. Usually, it is the debtor who is responsible for the fraud: he is interested in concealing or even improving his real financial situation. However, the surety contract is concluded between the surety and the creditor. Is the surety in a position to annul the contract if the deceit is practiced by a third party? On the other side, creditors (especially, banks) often possess the exact information about the financial capacity of the debtor: should they inform the surety about this? And what are the consequences if they do not? Can the surety ask for the annulment of the contract on the basis of creditor's non-disclosure?.

Peculiarities of Liability for Secured Obligations

The article analyzes peculiarities of manifestations of the civil liability juridical construction as applied to debtor-creditor relations arising as a result of a penalty, security, retention of the debtor's goods, surety, independent guarantee, and deposit and security payment. It has been concluded that, with respect to penalty and deposit, civil liability determines the basic elements of obligations. A security function of a deposit and penalty shall be exhausted by means of motivating to perform the obligation properly; thus, deposit or penalty agreements can be qualified as agreements to establish special measures of liability. With respect to security, retention and security payment, liability may be provided by an agreement between the Parties and is treated as an additional sanction for the breach of individual obligations. As to surety, the concept of liability is a key one and it allows separating the elements of a surety agreement from the principal obligation. The surety undertakes to fulfill his or her own obligation arising from a surety contract, rather than to recover losses or fulfill the obligation on behalf of a debtor under the principal obligation. The terms "solidarity" and "subsidiary" in relation to the "liability" of the surety refer to the relevant forms of surety. However, at the level of the judicial practice, an additional manifestation of an accessory character of surety was formulated - under the general rule, the surety is not held liable for the breach of his obligation, unless otherwise provided for by a surety contract. In respect of an independent guarantee, the opposite decision is formulated; under a general rule the guarantor is liable as any other debtor is under a monetary obligation. Therefore, such a manifestation of accessory means of obligation enforcement as the limitation of the liability of the surety or grantor may be regarded as a general rule for a certain group of security constructions.

Avoiding surety contracts in bankruptcy procedure

Serbia's courts jurisprudence has divergent attitudes with respect to the dilemma whether a surety contract represents a contract without consideration, which may be avoided once the guarantor is subject to bankruptcy procedure without any additional conditions, or an onerous contract. Whether a surety contract is an onerous one has anyhow been disputed in the legal theory. One school of thought considers this contract as non-onerous one, since vis-a-vis guarantor's obligation no benefit to be expected from the other contractual party (i. e. creditor) exists. The other school of thought understands surety (almost always) as an onerous contract bearing in mind that the guarantor who enters into this contract does not have intentio liberalis. There are numerous and nuanced views based on analyses of the relation between a guarantor and a debtor focused on the argument that surety is a contract without consideration if intentio liberalis existed vis-a-vis main debtor rather than vis-a-vis creditor. Our legal literature did not pay much attention to that issue until recently. In a rare text dedicated to it the author's basic standpoint is that surety represents a contract without consideration. An exception, depending on the circumstances of the case, could be surety given by a parent company for the obligation of a subsidiary, provided the former reasonably expected a benefit in terms of an increase in the value of shares. Commercial courts followed such reasoning. In this article an opposite stance has been argued. Namely, the onerousness of surety must be assessed based on the relation between the guarantor and the main debtor rather than between the guarantor and the creditor. As a rule, surety is an onerous contract because the guarantor expects to collect from the debtor through subrogation the amount he paid to the creditor; exceptionally, surety may be a non-onerous contract if intentio liberalis existed vis-a-vis main debtor. However, this does not mean that the guarantor gives up his right to claim from the debtor the amount paid because otherwise such transaction would represent an indirect gift rather than surety. This does mean that there is no remuneration for surety - a benefit the guarantor could expect from entering into a surety contract. Therefore, the author rejects the approach followed by a number of Serbia's courts that bankruptcy trustee may request a declaration that, in accordance with the rules on avoiding debtor's transactions, a surety contract has no legal effects.

Bank guarantee in Serbian and European legal systems

The paper analyses a bank guarantee as an institute derived from a surety contract. By issuing a bank guarantee the bank commits to the creditor that it will fulfill valid and due liabilities of a debtor, in the event of default by the debtor. This collateral demonstrates significant advantages as compared to other personal assets, particularly with regards to a higher level of protection to creditors in contractual relations. Due to the aforementioned benefit the institute has been increasingly applied in legal dealings, both in our and other legal systems. In the paper, I will point out normative solutions in terms of regulation of a bank guarantee as a specific legal activity in which there is no accessoriness, which is not the case with security. This research particularly focuses on the comparative legal analysis of this collateral.

The relation between suretyship and related institutes of commercial law

This paper analyses the surety contract and institutes of commercial law arising from this personal asset to secure claims. The roots of the institute of surety may be traced to the Law of the Twelve Tables. Assets to secure claims are important instruments of developing legal transactions and establishing legal security in the economy. A comparative approach to institutes which have evolved from the surety contract indicate the potentials of new assets to secure claims on the one, and possible courses of further development of these legal affairs on the other hand.

Laidavimo sutarties ginčijimas: teorinės ir praktinės problemos

During the last few years, unfair suretyships have come up as a topic on the European Community level. Unfair suretyship may be defined as suretyship entered into by non-professionals (often consumers) for the benefit of close relations or employers, whereby the surety has nothing to do with financial gains. Also, it may be defined as suretyship of shareholders, their spouses or even directors in order to secure small to medium size companies’ credits because it is all what such a company is able to offer to the creditor.The author analyzes the legal grounds of voidability of the surety contract in Lithuania, comparing them to foreign countries doctrine and case law. The author states that suretyships must be explored not only by law, but also by economics because suretyships make economic consequences as well as some recommendations on how suretyship law may be improved.Despite the fact that various legal grounds of voidability of the suretyship exist in different states, the research showed that it is quite impossible to make the suretyship voidable in Lithuania. First of all, there are no special legal grounds to void surety agreement and the case law on this issue is also incomplete. However, it is obvious that the existing case law does not meet the foreign practice because Lithuanian courts are not considering the economic interest of the surety and the disproportion of surety assets and liabilities as important as they are considered in foreign countries.Secondly, lower Lithuanian courts do not take into account the question of balance of interests of the borrower, the lender and the guarantor. Unfortunately, many cases do not pass the selection to the Supreme Court of the Republic of Lithuania that has to ensure uniform court practice of courts of general jurisdiction in Lithuania by means of precedents formulated in the cassation rulings.Thirdly, plaintiffs are often trying to make surety contracts voidable due to the lack of will or the lack of experience, which are subjective criteria, and it is hard to prove them, whereas courts tend to use objective bonus pater familias criteria. Therefore, to prove the legal grounds for the plaintiff is even more difficult.It must be noticed that the plaintiffs do not exercise their procedural rights properly as well, e.g., they do not try to use Article No. 1.81 of the Civil Code of the Republic of Lithuania (contracts contrary to public policy or good morals) or Article No. 3.85 of the Civil Code of the Republic of Lithuania, which could be an appropriate basis for them. Also, the plaintiffs do not tend to claim for contracts’ amendments.The author states that besides the economic interest of the surety and the disproportion of surety assets and liabilities, economic efficiency should be considered as one of the factors justifying legal intervention to contractual relationships.

A Feminist Perspective on Contract Theories from Law and Economics

This article offers a feminist perspective on contract theories in law,economics and law-and-economics. It identifies masculine traits presentcontract theories in all three disciplines. It then describes andassesses some developments that appear to be ‘feminising’: Therecognition of the importance of social norms in contract theory andtheories of contract as relationship. The article's main claim is that amasculine model of decision-making persists even within the less overtlymasculine models of contract. The problem of sexually transmitted debtresulting from a surety contract is analysed in detail as a specificexample supporting the article's general argument. The article concludesthat the way forward is to be found in a recognition of other ways ofmaking decisions.

Construction Contract Bonds

The surety industry and its procedures are unfamiliar to many project owners, design professionals, and contractors. This lack of knowledge often leads to misunderstandings and disputes. This paper outlines significant issues related to surety contract bonds and is the second part of a study focused on the surety industry. Regulation of sureties providing surety contract bonds is described, and factors influencing premiums are discussed. Rate tables compiled by the Surety Association of America are presented with example premium computations. Typical disputes arising from surety contract bonds are also outlined. Special concerns currently confronting the surety industry are described along with alternatives to surety bonding.

Suretyship. Interpretation of a Surety's Contract

Suretyship. Interpretation of a Surety's Contract

Suretyship: Interpretation of Surety Contract

Suretyship: Interpretation of Surety Contract

Suretyship. Surety's Defenses. Alteration of Surety's Contract by Amending Cause of Action

Suretyship. Surety's Defenses. Alteration of Surety's Contract by Amending Cause of Action

Suretyship. Surety's Defenses: On General Principles of Contract. Default Prior to Surety's Contract

Suretyship. Surety's Defenses: On General Principles of Contract. Default Prior to Surety's Contract