Unlimited Guaranty

Unlimited Guaranty

Generates a complete Unlimited Guaranty giving the Lender direct, uncapped recourse against a Guarantor for all present and future Borrower obligations.

Quick Start

Collect before drafting:

1. Credit documents — loan agreement, note, or facility defining the guaranteed Obligations
2. Parties — full legal names of Guarantor, Borrower, and Lender
3. Guarantor type — individual or entity (drives signature block and authority recitals)
4. Financial reporting — whether Lender requires ongoing financials from Guarantor

Document Sections

Required Waivers (Section 4)

Guarantor must waive all of the following:

• Presentment, demand for payment, protest, notice of dishonor
• Notice of acceptance of Guaranty
• Notice of creation or incurrence of new Obligations
• Notice of any Borrower or Lender action or inaction
• Right to require Lender to proceed first against Borrower or exhaust collateral
• Defense based on modification, extension, renewal, or amendment of Obligations
• All suretyship defenses (collateral impairment, co-guarantor release, etc.)
• Right to require marshaling of assets

Subrogation Language (Section 5)

Until all Obligations are indefeasibly paid in full and all Lender commitments are terminated, Guarantor waives and subordinates: (i) any subrogation right to Lender's claims against Borrower; (ii) any reimbursement or indemnity right from Borrower; and (iii) any right to participate in Lender-held security.

Pitfalls & Checks

• Payment not collection — Section 2 must expressly allow Lender to proceed against Guarantor without exhausting Borrower remedies or collateral
• "Indefeasibly paid in full" — always use this phrase, not merely "paid in full," to protect against bankruptcy preference/clawback
• Governing law — must match the underlying loan documents' choice of law and forum
• Entity authority — for entity Guarantors, include officer certificate or board resolution recital if Lender requires
• Continuing guaranty — confirm language covers obligations arising after execution
• [VERIFY] US jurisdiction only; state suretyship statutes may impose additional requirements
• [VERIFY] Anti-deficiency statutes (CA, AZ, others) may limit enforceability of certain waivers — flag for attorney review