Personal

Guarantee
(BORGTOCHT)
 OUTLINE
I. Introduction
II. Regulation on ICC
III. Classification of personal guarantee
IV. Subrogatie
 Article 1820 ICC

The provision of a guarantee is an agreement

in which a third party agrees, for the benefit of
the creditor, to fulfill the obligations of the
debtor, if he himself fails to fulfill these.
Elements:

• Third party binds himself

• For the benefit of a creditor
• To fulfill debtor obligations
• If the debtor fails to fulfill he’s obligation
Borgtocht is accesoir in nature or the
continuation of an agreement as a result of the
existence of a principal agreement. So, it’s
existence and validity depend on the existence
and validity of the principal agreement in
consideration of which the guarantee is given.
 Article 1822
• A guarantee can be given to secure the whole debt of the debtor or any
part thereof, but the guarantor cannot bind himself or be bound by more
onerous obligations than those of the debtor.
• If the guarantee has been provided in respect of more than the debtor
obligation, then borgtocht is not be entirely invalid, but shall be
restricted to that which is covered in the principal contract.
 Article 1823

• a guarantee can be given without being requested by

the debtor or even without the knowledge of or notice
to the debtor.
• One can also act as a guarantor, not only for the
principal debtor, but also for another existing
guarantor.
 Article 1831

The creditor must first seizure and sale the assets held
by the creditor to obtain repayment, before collect the
obligation from guarantor.
 Guarantor privilege
(i) the right to demand that the creditor first collects the debt due from the debtor,
so that the guarantor will only have to pay the unpaid difference.
(ii) the right to request the court, should more than one guarantor exist, that the
creditor must first divide his claim pro rata amongst the guarantors so that they are
not severally liable for the whole debt of the debtor.
(iii) the right to be released from the liability under the guarantee in the event that
the guarantor can no longer be subrogated in the rights of the creditor. The right of
subrogation of a guarantor, i.e., the right of a guarantor who has paid the debt of
a debtor to subrogate by operation of law the rights of a creditor vis-a-vis the
debtor, is deemed to be of such importance that, should the guarantor, through the
creditor's fault, no longer be able to subrogate the rights and privileges of the
creditor, he will be released from his guarantee.
 Classification of personal
guarantee
• Volunteer personal guarantee
• Mandatory personal guarantee
i.e. consequent from operation of law – guardian (article 335 ICC)
 Subrogratie
Article 1400
Creditor Debtor Subrogation, or assignment of the rights of
a creditor to a third party has paid this
creditor, arises by agreement or by law.
Article 1839
A guarantor who has paid, is have a claim
Guarantor against the principal debtor, whether the
guarantee has been given with or without
his knowledge. This claim for compensation
is take place, whether with regard to the
principal sum or with regard to interest and
costs.
THANK YOU