Limitation of guarantor’s liability
60 Limitation of guarantor’s liability
Total amount for which guarantor can be liable
A guarantee is void to the extent that it secures an amount, in relation to a credit contract to which this Code applies, that exceeds the sum of the amount of the liabilities of the debtor under the credit contract and the reasonable expenses of enforcing the guarantee, or any lesser amount agreed between the credit provider and the guarantor.
Unenforceable contracts
Nothing in subsection (1) prevents a credit provider from enforcing a guarantee relating to liabilities under a credit contract that is unenforceable solely because of the debtor’s death, insolvency or incapacity.
Debtors under 18 years of age
A guarantee which guarantees the liability of a debtor who was under 18 years of age when the liability was incurred cannot be enforced against the guarantor unless it contains a prominent statement to the effect that the guarantor may not be entitled to an indemnity against the debtor.
Guarantor may limit liabilities under continuing credit contract
In the case of a continuing credit contract, a guarantor may, by notice to the credit provider, limit the guarantee so that it applies only to liabilities related to credit previously provided to the debtor under the credit contract (including any liabilities not yet debited to the debtor’s account) and such further amount (if any) as the guarantor agrees to guarantee.
Guarantee must not limit indemnity
A guarantee is void to the extent that it limits the guarantor’s right to indemnity from the person whose liability the guarantor has guaranteed or it postpones or otherwise purports to limit the guarantor’s right to enforce the indemnity against the person.
Effect of section
This section does not affect a provision of a guarantee permitted by section 59.
The statute text is free to read above. View subscription options to unlock the case-law research tools for each provision.