Letter of advice from a legal advisor to a lender, confirming that the advisor has given independent legal advice to an individual who will act as guarantor for a company’s obligations under a loan agreement
Use this document:
- where a lender requires that an individual who is acting as guarantor takes independent legal advice
Key features include:
- letter from legal advisor addressed to the lender
- confirmation of advice given by the advisor to the guarantor
- confirmation that the guarantor understood the nature and extent of the guaranteed obligations
About this document
A lender will typically require that an individual guarantor takes independent legal advice before entering into the guarantee. This is done to avoid the possibility of a guarantee being potentially set aside by reason of the guarantee having been given under duress or having been procured by undue influence. This is particularly the case if the individual guarantor is the husband or wife of a shareholder or director of the corporate borrower.
The lender will also require that the independent legal advisor confirms in writing to the lender that the guarantor has received independent legal advice on the guarantee, that the guarantor understood that advice and is willing to enter into the guarantee.
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