When a third party or most commonly an individual is involved in a deal as a guarantor or insurer, he reserves the right to revoke the guaranty anytime he wants or feels needs to. The formal letter or notification that is sent to the creditor and principal is known as the revocation of guaranty notice. This notice includes the date when the revocation of the guaranty will be effective and the reasons of revoking the guaranty i.e. expiration of the agreement or violation of the contract by either party.
Brief Description of the Revocation of Guaranty Form:
When two parties want to complete a loan process or deal in a short period of time without involving any legal help, the debtor is required to introduce a third party in the process as a guarantor. The guarantor has the legal obligation to force the debtor to repay his debt or the creditor can hold the guarantor responsible for any liability. The guaranty by the third party is provided to the creditor and debtor on a written agreement which is known as the guaranty agreement. There are many elements included in the guaranty agreement but from the guarantor perspective, the most important clause of this agreement is the one that allows the guarantor to revoke the guaranty in particular situations enlisted on the agreement. This can be because the debtor is dead and there is no way of getting any debt from him of in case the creditor somehow violated the guaranty agreement allowing the guarantor to revoke the contract. In either case, the guarantor reserves the right to revoke or cancel the guaranty so that he will be no longer held responsible for the liabilities of the debtor.
In order to revoke the guaranty, the guarantor is required to send a formal notification or letter to the creditor informing him about the reasons of revoking the guaranty and the date when the cancellation will be assumed effective which can be the date when the creditor receives the revocation notice or some other date specified in the notification letter. This way once the creditor receives the revocation notice, he no longer can claim the guaranty if the revocation is effective from the moment he receives the letter or he can claim the guaranty if the revocation starts from another date in near future.
Key elements to include in the Revocation of Guaranty:
- Name of the debtor with address
- Also Name of the creditor with address
- Name of the guarantor with address
- Details of the guaranty with reference number of the agreement and date when the agreement was signed
- Details of the debt (money borrowed by the debtor)
- Particulars of the return of the debt (i.e. date, schedule and periodic installments if applicable)
- Signed statement by the guarantor for the revocation of guaranty
- Reasons why the guarantor is revoking the guaranty i.e. expiration of the agreement or violation by either party
- Date when the revocation note is being signed
- Signature of the guarantor with date
Here is preview of a Free Sample Revocation of Guaranty created as fill-able PDF form,
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