A guaranty is a contract under which one person agrees to pay a debt or perform a duty if the other person who is bound to pay the debt or perform the duty fails to do so. A guaranty of the payment of a debt is different from a guaranty of the collection of the debt. A guaranty of payment is absolute while a guaranty of collection is conditional.
Puerto Rico Guaranty of Collection of Promissory Note is a legal agreement that serves as a form of security for the lender in case the borrower defaults on their promissory note obligations. This type of guarantee is commonly used in financial transactions and typically provides an additional layer of protection for the lender. The Puerto Rico Guaranty of Collection of Promissory Note is designed to ensure that the lender has a recourse to collect the outstanding balance and any associated fees, interest, or costs in the event of default. This guarantee may include specific terms and conditions, as well as provisions for legal actions if necessary. Different types of Puerto Rico Guaranty of Collection of Promissory Note may exist, based on the specific terms and conditions agreed upon by the parties involved. These variations can include: 1. Unconditional Guaranty: This type of guaranty provides the lender with an unconditional promise that the guarantor will fulfill the obligations of the promissory note, irrespective of any other factors. 2. Conditional Guaranty: In contrast to an unconditional guaranty, a conditional guaranty may include certain criteria or conditions that must be met before the guarantor becomes obligated. For example, it could require the borrower's default or failure to pay. 3. Limited Guaranty: A limited guaranty restricts the guarantor's liability, either by capping the maximum amount covered by the guaranty or by specifying the limited circumstances under which the guarantee is in effect. 4. Continuing Guaranty: This type of guaranty remains in effect even if the borrower refinances or extends the original promissory note, ensuring the lender's right to collect goes beyond the original terms. It is important to note that the terms and provisions of Puerto Rico Guaranty of Collection of Promissory Note vary based on the specific requirements of the parties involved. Each agreement should be carefully reviewed and negotiated to meet the lender's needs and adhere to applicable Puerto Rico laws. Disclaimer: This content is for informational purposes only and should not be considered legal advice. It is recommended to consult with a qualified attorney for guidance on specific Puerto Rico Guaranty of Collection of Promissory Note matters.
