Guarantee checklist

Caption text

Issue	Narrative	Comment
Consideration	Is there consideration?
Permanence	Is it unconditional, irrevocable and continuing?
Unaffected	Is it unaffected by: interim payments
	obligor’s insolvency
	amendment or discharge of obligor’s obligations
	beneficiary’s waiver or forbearance to obligor
	other customary grounds for discharge of guarantees
Punctual performance	Does it guarantee the obligor’s “punctual performance”?
Without prejudice	Is it without prejudice to beneficiary’s rights against obligor?
Independence	Is it independent of any other credit support arrangement between beneficiary and obligor?
Indemnity	Is there an indemnity against beneficiary’s costs of enforcement of guaranteed obligations?
	Is there an indemnity wrt the value of obligations which are void/unenforceable against the obligor?
Currency and payment	Must payment must be in immediately available funds in the currency of the underlying obligations?
No set-off or counterclaim	Is set-off or counterclaim against moneys beneficiary owes the guarantor excluded?
Interest	Must guarantor pay interest from the date of demand until payment in full?
Suspense account	May beneficiary place amounts beneficiary into a suspense account pending satisfaction in full?
Demand process	May beneficiary demand without first taking steps vs the obligor?
No discharge if prejudice	May beneficiary decline to discharge the guarantee if it might prejudice its claim under insolvency laws?
Reinstatement	If beneficiary discharges, is guarantor’s liability reinstated should obligor’s payments be set aside?
Guarantor’s rights versus obligor	Must Guarantor obtain beneficiary’s consent before taking action against obligor until guaranteed obligations are fully paid?
	Must guarantor hold sums it receives from obligor pending satisfaction to beneficiary’s order
Tax gross-up	Must guarantor gross up if subject to withholding on guarantee payments?