The SCC has issued a crucial decision on the development of law related to the surety agreement clarifying on several aspects of this type of contract such as parties to such agreement, legal form and mandatory content (Decision No. 60260, dated 19.08.2022 г. under civil case No. 490/2021).
The supreme judges have clearly signalled that:
» Any person can accept to be a guarantor for another person’s obligation both on his own initiative and on the initiative of the debtor or the creditor.
» Regardless of whose initiative the person gives consent to be a guarantor, the parties to the guarantee agreement are the creditor and the guarantor.
» The guarantee agreement must be concluded in writing.
» The written form will be observed both in cases where the contract is concluded by means of a separate document or when it is incorporated into another document (e.g., credit facility agreement).
» The written form of the guarantee agreement helps parties to substantiate the specific contractual arrangements in case of a dispute.
» The guarantee agreement shall contain stipulations on determining the obligation which will be assumed by the guarantor, explicit consent that the guarantor shall assume the obligation of the debtor and description of the exact range of the guarantor’s responsibility under the main contract between the debtor and the creditor.