A guaranty is an undertaking on the part of one person (the guarantor) which binds the guarantor to performing the obligation of the debtor or obligor in the event of default by the debtor or obligor. The contract of guaranty may be absolute or it may be conditional. An absolute or unconditional guaranty is a contract by which the guarantor has promised that if the debtor does not perform the obligation or obligations, the guarantor will perform some act (such as the payment of money) to or for the benefit of the creditor.
A guaranty may be either continuing or restricted. The contract is restricted if it is limited to the guaranty of a single transaction or to a limited number of specific transactions and is not effective as to transactions other than those guaranteed. The contract is continuing if it contemplates a future course of dealing during an indefinite period, or if it is intended to cover a series of transactions or a succession of credits, or if its purpose is to give to the principal debtor a standing credit to be used by him or her from time to time.
The New Mexico Continuing and Unconditional Guaranty of Business Indebtedness Including an Indemnity Agreement is a legal document that establishes a guarantee and indemnification for business debts in the state of New Mexico. This agreement is commonly used in various business transactions to provide assurance to lenders and financial institutions that their loans will be repaid, even if the primary borrower defaults on their obligations. The New Mexico Continuing and Unconditional Guaranty of Business Indebtedness Including an Indemnity Agreement encompasses several types, which may vary based on the specific terms and conditions set forth by the parties involved. Some key types include: 1. General Continuing and Unconditional Guaranty: This is the most common type of guaranty agreement where the guarantor assumes full responsibility for the business debts and agrees to repay the lender immediately upon demand, regardless of any defenses or claims the borrower may have. 2. Limited Continuing and Unconditional Guaranty: In this type, the guarantor's liability is limited to a specific dollar amount or a defined portion of the overall indebtedness. The guarantor is only responsible for the amount stated in the agreement and not for any excess. 3. Joint and Several Continuing and Unconditional Guaranty: This type of guaranty involves multiple guarantors who collectively assume full responsibility for the business debts. In case of default by the borrower, any or all of the guarantors can be held liable for the full amount owed. 4. Continuing Action Waiver Guaranty: This type specifies that the lender can proceed directly against the guarantor in the event of default by the borrower, without the need to first exhaust remedies against the borrower or collateral securing the debt. The New Mexico Continuing and Unconditional Guaranty of Business Indebtedness Including an Indemnity Agreement typically includes various elements, such as: — Identification of the parties involved: The agreement clearly states the names and addresses of the borrower, guarantor(s), and the lender. — Description of the indebtedness: The types of debts covered by the guaranty, including existing debts and future obligations, are outlined in detail to ensure clarity and specificity. — Guarantor's unconditional promise: The guarantor unequivocally pledges to repay the entire amount owed by the borrower, regardless of any defenses or claims the borrower may have. — Indemnification provision: The agreement may include an indemnity clause whereby the guarantor agrees to compensate the lender for any losses, costs, or damages arising from the borrower's default. — Governing law and jurisdiction: It is common for the agreement to specify that it is governed by the laws of the state of New Mexico and that any disputes will be resolved in the appropriate state court. It is important to note that the New Mexico Continuing and Unconditional Guaranty of Business Indebtedness Including an Indemnity Agreement should be carefully reviewed and negotiated by all parties involved, preferably with the assistance of legal counsel, to ensure compliance with state laws and to protect the rights and interests of each party.
