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Contract trap · Any contract

Unlimited guarantor liability

A parent, friend, spouse or the signing director guarantees 'all obligations' jointly and severally — including interest, penalties, costs, other tenants' shares, 'any extension, renewal or variation' and future debts — irrevocably, with no cap, no notice of default and sometimes via a single extra signature line 'individually and on behalf of'.

Severity
Severe
How often it turns up
Uncommon
Holds up?
Usually enforceable
Clause phrases
24

What it looks like in a contract

Redline matches these phrases against your document verbatim. Drafters rarely invent new wording — they copy it, which is why the same sentences turn up across unrelated contracts.

In English-language contracts

  • guarantor
  • jointly and severally liable
  • co-signer
  • continuing guarantee
  • any extension, renewal or variation
  • irrevocable and unconditional
  • we may collect from you without first trying to collect from the borrower
  • you consent to any extension, renewal or modification
  • waives presentment, demand, notice
  • the undersigned personally guarantees
  • individually and on behalf of
  • shall not be released

In Russian-language contracts

  • поручитель
  • договор поручительства
  • отвечает солидарно с Нанимателем
  • поручитель отвечает солидарно
  • в том же объеме, что и Заемщик
  • включая уплату процентов, неустойки, возмещение судебных издержек
  • поручитель согласен с любым изменением условий
  • на весь срок действия договора, включая продление
  • поручительство сохраняет силу в случае смерти Заемщика
  • отвечает всем принадлежащим ему имуществом
  • учредитель поручается за исполнение обязательств
  • подписывая настоящий договор, лично гарантирует

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Why it bites

The lender or landlord pursues the guarantor first; a guarantee signed for a 12-month student let or a supply account can run for years and cover strangers' arrears or debts after the company fails; the limited-liability shield disappears without the owner noticing.

Is it enforceable where you are

The same clause can be routine in one country and void in another. What follows is what the law says where you are — not advice on your particular contract.

In the US, unconscionability and the FTC Act §5 bar on unfair and deceptive practices are the general backstops; in the EU and the UK, consumer standard terms are tested under Directive 93/13 and the Consumer Rights Act 2015.

United States

Enforceable if in writing (Statute of Frauds); FTC Credit Practices Rule 16 CFR 444.3 requires a 'Notice to Cosigner'; ECOA limits demanding a spouse's signature; lease guaranties strictly construed as to renewals (NY case law); guarantees buried in credit applications have been enforced.

  • Cited
  • 16 CFR 444.3
  • ECOA
  • FTC

European Union

CJEU C-74/15 Tarcău (2015) — a private guarantor is a consumer under 93/13; Germany: written form (§766 BGB), Mietbürgschaft capped at 3 months' rent (BGH VIII ZR 379/12), overburdening family guarantees void; France: cautionnement must state duration and amount in the guarantor's own writing (loi 89-462 art 22-1).

  • Cited
  • §766 BGB
  • BGH VIII ZR 379/12
  • C-74/15
  • loi 89-462 art 22-1
  • Tarcău

United Kingdom

Enforceable if in writing (Statute of Frauds 1677 s.4); consumer guarantees subject to CRA 2015 fairness — 'any extension or variation' wording may be unfair (Shelter/CMA); variation without consent releases the guarantor (Holme v Brunskill); guarantor fees banned (Tenant Fees Act 2019); CONC affordability duties (Amigo redress 2021-22); business guarantors unprotected.

  • Cited
  • CMA
  • CRA 2015
  • Holme v Brunskill
  • Tenant Fees Act 2019

Russia

ГК ст. 361-367 — солидарность по умолчанию (ст. 363); согласие на будущие изменения действительно только при указании пределов (ст. 367 п. 2); без срока — прекращается через год после срока исполнения (ст. 367 п. 6); подпись директора «от имени ООО» поручительством не является (ст. 362 — письменная форма); Пленум ВС № 45/2020.

  • Cited
  • ГК ст. 361-367
  • Пленум ВС № 45/2020
  • ст. 362
  • ст. 363
  • ст. 367 п. 2
  • ст. 367 п. 6

Where this has actually happened

Regulator actions, court rulings and the contracts they were fought over.

  • Amigo Loans (UK guarantor lender) — FCA-sanctioned redress scheme after affordability failings (2021-2022)
  • FTC Credit Practices Rule 16 CFR 444.3 — mandatory 'Notice to Cosigner'
  • Shelter England guidance 'Challenging a tenancy guarantee debt' — open-ended 'any extension or variation' guarantees may be unfair
  • Tenant Fees Act 2019 — guarantor fees listed as prohibited payments

What to do

In order, from the thing that takes a minute to the thing that takes a letter.

  1. Cap the guarantee by amount, term and named debtor
  2. Refuse 'continuing', 'irrevocable' and advance consent to modifications
  3. Require notice of default within 30 days and a written release on termination
  4. Sign only in your corporate capacity ('Director, for and on behalf of X Ltd')
  5. US: read the mandatory 'Notice to Cosigner'
  6. RU: без указания срока поручительство прекращается через год после срока исполнения (ст. 367 п. 6 ГК).

Check your own document

Traps that travel with it

Drafters who use one of these usually use several.

79 traps · 1789 verbatim clause phrases