Document background
The Corporate Guarantee Agreement is a crucial document in Indian corporate and banking practice, commonly used when a stronger corporate entity provides financial backing for a weaker entity's obligations. This agreement becomes necessary in various scenarios, including project financing, working capital facilities, term loans, and other corporate borrowings where additional security is required by lenders. The document, governed by Indian law, must comply with the Indian Contract Act, Companies Act, and relevant RBI guidelines. It typically includes detailed provisions on the guarantee's scope, enforcement mechanisms, representations and warranties, and termination rights. The agreement requires careful structuring to ensure compliance with corporate authorization requirements and to maintain its enforceability under Indian law.
