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A deed of suretyship is a form of security in terms of which one person (the surety) undertakes to be personally liable for the payment of another person’s debt. This means that if the borrower (or debtor) fails to repay the debt, then the lender (or creditor) will be able to claim the outstanding debt from the person(s) who have given the suretyships instead.
Our deed of suretyship allows you to record in comprehensive detail not only the terms on which the loan has been made or credit given but also the terms on which the surety will be held laible for repayment. Issues addressed by the deed of suretyship include the details of the parties, the repayment terms of the debt, interest on the debt (if any), the circumstances in which the debt will become immediately repayable by the surety, security for repayment and the protection of the creditor against a default in repayment. The agreement also takes account of the National Credit Act and ensures compliance with its provisions.
A comprehensive deed of suretyship ensures that the creditor has maximum protection against non-payment and that the surety is clear about its obligations. In this way, disputes are avoided. Even if a dispute does arise, the deed of suretyship provides cost-effective and meaningful remedies for the enforcement of its terms. In other words, this is an essential document for anyone intending to grant credit or lend money.
Full details of the contract:
The drafting process utilized for the deed of suretyship includes the following capabilities:
It is first ascertained whether or not the transaction which is being secured by the deed of suretyship falls within the ambit of the National Credit Act.
If so, a comprehensive reformulation of the terms of the deed of suretyship is completed in order to ensure compliance with the Act.
The suretyship can secure both existing and future debts, in respect of a limited or unlimited amount and can cover a single debt or constitute a continuing covering suretyship.
The suretyship caters for up to 15 sureties, 15 creditors and 15 debtors.
Full details of every party signing the suretyship are inserted, including full names, identity or passport numbers, addresses, contact numbers and email.
Corporate entities are fully catered for, including private and public companies, close corporations, trusts, partnerships, sole proprietorships and registered or unregistered voluntary associations.
In the event of a corporate entity being a party to the suretyship, provision is made for the full identification of the entity’s representative and protection against insolvency or potential insolvency is catered for.
The amount of the debt which is being secured by the suretyship is specified. (All currencies are catered for.)
The circumstances giving rise to the debt are recorded in full.
If requested, the terms upon which the sureties will make payments to the lender will be incorporated, including the circumstances in which immediate payment will be due, the method by which payments will be made the persons who are to receive payment.
If requested, comprehensive terms relating to the payment of interest can be included, including the rate of ordinary and penalty interest, the regularity with which interest will be compounded and paid, the total interest payable, and the circumstances in which interest rates may be varied.
Provision is made for the delivery of statements of account, if required, and for the allocation of payments.
Conduct amounted to a breach of the suretyship is clearly delineated and the consequences of a breach are canvassed in full – including remedies (both under the common law and the National Credit Act), legal costs, court jurisdiction and the legitimate exclusion of certain defences and exceptions.
Comprehensive warranties given by the sureties are included in the suretyship.
The contents and terms of each deed of suretyship are dependent on the responses given during the online interview process. As a result, the above list constitutes a broad overview of the issues typically addressed in the document and is not intended to be comprehensive.