Document background
The Limited Guarantee Agreement is a crucial document in Canadian commercial transactions where partial financial security is required. It is commonly used in situations where a lender or creditor requires additional security for a loan or other financial obligation, but the guarantor's liability needs to be capped or limited in some way. This document is particularly relevant in corporate group structures, project financing, or commercial lending scenarios where parent companies or related entities provide guarantees for subsidiaries or affiliated companies. The agreement must comply with Canadian federal and provincial requirements, including writing and execution formalities under the applicable Statute of Frauds, and may need to address specific provincial law considerations, especially for cross-provincial transactions or those involving Quebec's civil law system.
