A guaranty is an undertaking on the part of one person (the guarantor) that is collateral to an obligation of another person (the debtor or obligor), and which binds the guarantor to performance of the obligation in the event of default by the debtor or obligor.
The contract of guaranty may be absolute or it may be conditional. An absolute 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 line of credit is an arrangement in which a lender extends a specified amount of credit to borrower for a specified time period.
📜 Detailed Description of Oklahoma Absolute Guaranty of Payment in Consideration of Extension of a Line of Credit 🌾 Keywords: Oklahoma, Absolute Guaranty of Payment, Line of Credit, Extension, Types Introduction: In Oklahoma, an Absolute Guaranty of Payment in Consideration of Extension of a Line of Credit is a legally binding agreement that establishes a guarantee of payment for a specified amount when a line of credit is extended. This agreement provides the lender with assurance that the borrower's obligations will be fulfilled, giving them the confidence to offer a line of credit. Types of Oklahoma Absolute Guaranty of Payment: 1. Personal Guaranty: A personal guaranty involves an individual (such as a business owner or shareholder) assuming personal liability for the line of credit extended to their business. If the business defaults, the guarantor becomes personally responsible for repaying the outstanding balance. 2. Corporate Guaranty: In a corporate guaranty, a corporation guarantees the repayment of a line of credit extended to a subsidiary or affiliated company. The corporation takes on the responsibility if the borrower is unable to fulfill repayment obligations. 3. Limited Guaranty: A limited guaranty places specific restrictions on the guarantor's liability. It may limit the amount of the guarantee or define certain triggering events that activate the guarantor's obligations. Key Elements of an Oklahoma Absolute Guaranty of Payment: 1. Identifying Information: The guaranty should include the legal names and relevant contact details of the borrower, lender, and guarantor. Additionally, the line of credit details, such as the maximum amount, interest rate, and repayment terms, should be clearly stated. 2. Absolute and Unconditional Guarantee: The guaranty should explicitly express that the guarantor's obligation to pay is absolute and unconditional, regardless of any disputes, defenses, or counterclaims the borrower may have against the lender. 3. Extension Consideration: The agreement must state the consideration given by the lender for extending the line of credit. This could be in the form of an upfront fee, an increase in interest rate, or any other agreed-upon consideration. 4. Guarantor's Representations and Warranties: The guarantor should make representations and warranties, affirming their authority to enter into the guaranty, possessing the financial ability to fulfill the obligations, and acknowledging their willingness to provide necessary financial information. 5. Default and Enforcement: The guaranty should define default events, such as non-payment or breach of the agreement's terms. It should also outline the lender's rights and remedies upon default, which may include acceleration of the debt, pursuit of legal action, or seeking recovery from the guarantor. Conclusion: An Oklahoma Absolute Guaranty of Payment in Consideration of Extension of a Line of Credit offers lenders greater security when extending a line of credit. It involves a legally binding agreement where a guarantor takes on the responsibility of repayment in case the borrower is unable to fulfill their obligations. Personal, corporate, and limited guaranties are some types associated with such agreements. It is crucial for all parties involved to carefully review and understand the terms and conditions described in the guaranty before signing.
