Guarantee: contract clause

Clause wording to include in a contract for a company to guarantee the obligations of one party to a contract. Suitable where the guarantor and the guaranteed party are both companies incorporated in England and Wales.

for guarantee clauses to be included in a contract
for a guarantee where both guarantor and the guaranteed party are incorporated in England and Wales

What key features are included?

guarantor to be included as party to the contract
guarantee undertakings given by way of both guarantee and indemnity
standard creditor protections for the continuing effect of the guarantee
warranties from the guarantor
provision for contract to be executed as a Deed

What else do I need to know?

One party to a contract may require that the other party’s obligations under the contract are guaranteed by another person. Rather than entering into a separate deed of guarantee, the guarantee obligations and related wording can be included in the contract itself, with the guarantor also becoming a party to the contract.

What other documents are available?

For a standalone form of guarantee to be given by a company (as opposed to an individual), see

Guarantee: corporate guarantor.

For a form of guarantee to be given by an individual (as opposed to a company), see Guarantee:

individual guarantor.

Description

When do I use this document?

for the appointment of an individual to provide consulting services through a service company
for a fixed term appointment or an appointment terminable on notice

What are the key features?

24 clauses over 16 pages
time-based appointment for a fixed term, terminable by notice by either client or consultant
service performance obligations on the consultant company, including for performance of the services by the named individual
consulting fees on the basis of time spent at an agreed contractual rate
ownership of intellectual property rights arising from the services
status of the consultant as an independent contractor
early termination for breach and other circumstances

What else do I need to know?

Often, this type of Consultancy Agreement is also accompanied by a letter from the named individual to the client. This will contain undertakings from the individual directly to the client covering the following:

that the individual owns the service company and will continue to do so
that the individual will be employed by the service company by the individual
that the client will own intellectual property rights in materials/work product generated by the individual
that the individual will be responsible for the service company’s performance of the consultancy agreement

We have a form of this side letter available – see

Consultancy Agreement: company (individual side letter)

What other documents are available?

For a form of consultancy for a service company on a project basis, see

Consultancy Agreement: company (project-based)

For forms of consultancy agreement with an individual consultant, see

Explanatory Guides

As with all of our document templates, your purchase will include access to clear explanatory guidance on the document and its use.

£25.00 exc VAT

Updated by a lawyer on 05/09/2024

Updated By a lawyer on 01/05/2023

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Guarantee: contract clause