Document background
The Guarantor In Loan Agreement is a crucial security document used in UAE lending transactions where additional security is required beyond the borrower's own covenant. This document is particularly relevant when a lender requires extra assurance for loan repayment, common in both commercial and personal lending scenarios. The agreement must comply with UAE Federal Law No. 5 of 1985 (Civil Code) articles relating to guarantees (1056-1094), UAE Federal Law No. 18 of 1993 (Commercial Code), and relevant Central Bank regulations. It's essential in scenarios involving corporate groups where parent companies guarantee subsidiaries' obligations, or where individuals provide personal guarantees for corporate borrowing. The document includes detailed provisions on the guarantee's scope, enforcement mechanisms, and the guarantor's obligations, all structured to ensure compliance with both UAE law and Sharia principles.
