Guarantee period
March 30, 2020

In business activities when concluding contracts of guarantee, the issue of this guarantee duration is often overlooked. In this case, lawyers, in order not to bother, simply prescribe in the contract a phrase that the validity of the guarantee period lasts when the secured obligations are discharged.

Our advice is to never do that. Farther, let us consider the causes.

To do this, let's examine in detail the question of "when" the guarantee ends.

The guarantee shall be terminated upon the expiration of the period specified in the contract of guarantee for which it was given. If such a deadline is not set, it shall be terminated provided that the creditor does not sue the guarantor within a year from the date of maturity of the obligation secured by the guarantee.

When the deadline for the fulfillment of the main obligation is not specified and cannot be determined or determined by the time of demand, the guarantee is terminated if the creditor does not file a claim against the guarantor within two years from the date of conclusion of the guarantee contract.

Making a demand on the debtor by the creditor about early performance of obligations does not reduce the guarantee period, determined on the basis of the initial conditions of the main obligation.

The Plenary Session of the Supreme Arbitration Court of the Russian Federation in paragraphs 33 and 34 of resolution dated 12.07.2012 N 42 "On Certain Issues of Settlement of Disputes Related to the Guarantee" clarified that the condition of the contract on the validity of the guarantee until the actual fulfillment of the secured obligation cannot be considered as establishing the validity period of the guarantee since it does not meet the requirements of Article 190 of the Civil Code of the Russian Federation. In this case, the provision that the guarantee is terminated is applicable if, within a year from the date of fulfillment of the term secured by the guarantee, the creditor does not sue the guarantor.

Tatyana Dzhulai
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