The guarantee (§§ 765 ff. BGB, § 349 et seq. HGB) is a contract between the surety and the creditor of a third party in which the surety undertakes to the creditor to guarantee the fulfillment of the third party's obligations.
It is one of the personnel security.
The amount of the guarantee depends on the existence of the main debt. If this increases through interest or other Cost of capitalthe surety is also liable for it. If the main debt is reduced, the amount of the guarantee is reduced accordingly.
In principle, the declaration of the guarantee must be made in writing. This does not apply to full merchants if the takeover is a commercial transaction for them. Types of guarantee are:
The default guarantee, in which a surety does not have to pay until the obligee has the foreclosure tried unsuccessfully in the principal debtor's assets. He is therefore only liable for the default proven by the obligee.
The absolute guarantee, in which a surety has to pay immediately at the request of the obligee if the debtor does not fulfill his obligations in accordance with the contract. The surety is thus treated as if he himself were the main debtor. The absolute guarantee is the rule with registered traders.