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Cases where the guarantor exempts or mitigates the guarantee liability

Time: 2013-12-06         Source: Financial 360 finishing         Author: Yu Yu

Guarantee liability arises because of the guarantee contract. It is a kind of debt liability that the guarantor assumes for the creditor. This kind of liability has different characteristics from the general debt liability, and it varies with different guarantee methods. The content of the guarantee responsibility can be specifically divided into two types: Responsibility and damage liability. Responsibility for performance on behalf of the debtor means that when the principal debtor fails to perform the debt, the guarantor replaces the debtor and performs the debtor’s debt to the creditor. Damage liability refers to the form in which the guarantor assumes liability for compensation when the principal debtor has caused damage to the right holder and cannot be compensated. There are several ways to ensure the elimination of responsibilities:

(a) The elimination of the main creditor’s rights. Guaranteed bonds are subordinated to the main claims, and the principal claims are eliminated for the reasons of liquidation, withdrawal, offset, exemption, and equivalence. The basis for the existence of the guaranteed debt disappears, and the guarantor's guarantee responsibility is naturally attributable to elimination.
(b) The transfer of the principal debt to a third party without the consent of the guarantor. Because the guarantee is very personal and creditworthy, the guarantor generally only provides guarantees for specific debtors. Once the main debt is transferred, without the guarantor’s consent, the guarantor does not have a trust relationship with the new debtor, so that he can bear the trust. Guaranteed responsibility is not fair. Therefore, Article 23 of China's "Law on Security" stipulates: "If the creditor permits the debtor to transfer the debt during the guarantee period, it shall obtain the written agreement of the guarantor. The guarantor shall no longer bear the guarantee responsibility for the debt transferred without his consent."
(3) The creditor and debtor agree to change the main contract without the consent of the guarantor. Article 24 of the "Guarantee Law" of China stipulates: "If the creditor and the debtor agree to change the main contract, they shall obtain the written agreement of the guarantor. Without the guarantor's written consent, the guarantor will no longer bear the guarantee liability. If there is an agreement in the guarantee contract, it shall be in accordance with the agreement." .
(d) The warranty period expires and the creditor is not a request. The existence of any right has a certain period of time, and the creditor's right to the guarantor is a specific right to request, and exists within the guarantee validity period. If the creditor does not claim rights within the warranty period, the guarantee period expires, the guarantee debt is destroyed, and the guarantor no longer bears responsibility.
(e) Guarantee the cancellation or termination of the contract. The guarantee contract is an independent debtor-debtor relationship, which can also be based on the agreement between the creditor and the guarantor to eliminate the guarantee contract; or it is stipulated that when a certain condition is fulfilled, one party has the right to terminate or rescind the contract, so that the guarantee contract will not have effect from the beginning.
(6) The guarantor performs the guaranteed debt. The guarantor assumes the responsibility of guarantee according to the guarantee contract, so that the creditor’s claim can be realized and the debt can be eliminated.

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