Drafting guaranty agreements manually requires extensive research across multiple legal resources, careful citation verification, and hours of document review to ensure all standard clauses meet current best practices. Corporate attorneys spend 4-5 hours researching templates, verifying citations from bar associations and legal publishers, and customizing language to match the underlying debt obligation—time that could be spent on higher-value strategic work.
Drafting guaranty agreements requires meticulous attention to party identification, suretyship waivers, enforcement provisions, and jurisdiction-specific requirements. Manual drafting takes hours of careful legal analysis to ensure the guarantee is enforceable and protects the creditor's interests while clearly defining the guarantor's obligations. Missing critical provisions or using ambiguous language can render the guarantee unenforceable when it's needed most.
CaseMark automates guaranty agreement drafting by generating comprehensive, enforceable documents with all essential provisions including unconditional guarantee language, suretyship defense waivers, representations, covenants, and remedies. The AI ensures consistency across all sections, proper party identification, and jurisdiction-appropriate provisions, delivering execution-ready agreements in minutes instead of hours.
This workflow is applicable across multiple practice areas and use cases
Guaranty agreements are essential components of commercial loan transactions where lenders require personal or corporate guarantees to secure debt obligations.
This is a core document in loan and financing practice, as guarantees are standard credit enhancement tools required by lenders in most commercial lending transactions.
Commercial real estate transactions frequently require guaranty agreements when entities purchase or develop properties with financing, where lenders demand personal guarantees from principals.
Real estate finance lawyers regularly draft guarantees for construction loans, acquisition financing, and commercial mortgages where lenders require additional security beyond the property.
Financial institutions regularly require and review guaranty agreements as part of credit underwriting, loan documentation, and regulatory compliance with lending standards.
In-house counsel at banks and financial institutions use guaranty agreements extensively to manage credit risk and ensure compliance with lending regulations and internal credit policies.
M&A transactions often involve guaranty agreements for seller financing, earnout obligations, or when buyers require parent company guarantees of subsidiary performance under acquisition agreements.
Guarantees are commonly used in M&A deals to secure deferred payment obligations, indemnification claims, and performance of post-closing covenants by acquired entities.
Commercial landlords frequently require personal or corporate guarantees of lease obligations when tenants are newly formed entities or have limited financial strength.
Guaranty agreements are standard in commercial leasing to secure tenant obligations, particularly for startups, subsidiaries, or entities without substantial assets or credit history.
A guarantee of payment is an absolute, unconditional obligation that allows the creditor to proceed directly against the guarantor without first attempting to collect from the principal debtor. A guarantee of collection requires the creditor to exhaust remedies against the principal debtor before pursuing the guarantor. CaseMark drafts guarantees of payment by default, as they provide stronger creditor protection, but can be customized based on your transaction requirements.
An enforceable guaranty requires clear identification of all parties, specific description of the obligations being guaranteed, adequate consideration, unconditional guarantee language, and waivers of common suretyship defenses. CaseMark automatically includes representations regarding the guarantor's authority and solvency, covenants to maintain financial condition, events of default, and creditor remedies. The system also ensures proper execution blocks and governing law provisions appropriate for your jurisdiction.
A continuing guaranty can cover both existing and future obligations up to a specified maximum amount or without limitation. CaseMark allows you to specify whether the guarantee is limited to a specific transaction or covers all obligations the principal debtor may incur with the creditor over time. The system includes appropriate language to ensure the continuing nature of the guarantee is clearly stated and enforceable, including survival provisions that maintain the guarantee despite modifications to underlying obligations.
CaseMark incorporates governing law provisions, consent to jurisdiction clauses, and execution requirements appropriate for your specified jurisdiction. The system can include spousal consent signature blocks where required by state law, notarization provisions where advisable, and jurisdiction-specific suretyship defense waivers. While the generated document is designed to be execution-ready, CaseMark recommends review by counsel familiar with local law for high-value transactions or complex multi-jurisdictional guarantees.
CaseMark includes provisions specifying whether the guarantee survives modifications to the underlying obligation. Typically, the guarantee remains in effect despite modifications unless they materially increase the guarantor's risk without consent. The system drafts language preserving the creditor's rights despite any forbearance, extension, or modification granted to the principal debtor, while protecting the guarantor from material changes that substantially alter the original risk. You can customize these provisions based on the parties' negotiated terms.