Guarantee & indemnity template (Uganda)
In brief
A precedent guarantee by which a guarantor promises to pay if the principal debtor defaults.
When to use this
When taking security for a debt or obligation by a third-party guarantee.
When a bespoke document is needed instead: For complex or cross-border guarantees — take advice.
The template
A precedent only. Replace every [PLACEHOLDER] with your own details; it contains no real party data. Have it reviewed before use.
Title
GUARANTEE AND INDEMNITY
Date & parties
THIS GUARANTEE AND INDEMNITY is made on [DATE]
BETWEEN [GUARANTOR FULL NAME], of [ADDRESS] (“the Guarantor”)
AND [CREDITOR NAME], of [ADDRESS] (“the Creditor”),
in respect of the obligations of [PRINCIPAL DEBTOR NAME], of [ADDRESS] (“the Principal Debtor”).
1. Guarantee
1.1 The Guarantor unconditionally guarantees to the Creditor the due payment of all sums the Principal Debtor owes or will owe the Creditor under [the agreement dated [DATE] / the facility] (“the Guaranteed Obligations”), up to a maximum of UGX [LIMIT] plus interest and costs.
2. Indemnity
2.1 As a separate and continuing obligation, the Guarantor indemnifies the Creditor against any loss arising if any Guaranteed Obligation is or becomes unenforceable against the Principal Debtor.
3. Demand
3.1 The Guarantor shall pay on the Creditor’s first written demand any sum the Principal Debtor has failed to pay, without the Creditor having to first proceed against the Principal Debtor or any security.
4. Continuing security
4.1 This is a continuing security for the whole of the Guaranteed Obligations until they are fully discharged, and is not satisfied by any intermediate payment.
5. Preservation of the guarantee
5.1 The Guarantor’s liability is not discharged or reduced by: any time, indulgence or variation given to the Principal Debtor; the release of any other guarantor or security; or any unenforceability against the Principal Debtor.
6. Subrogation
6.1 The Guarantor shall not seek to recover from the Principal Debtor until the Creditor has been paid in full.
7. General
7.1 This guarantee is in writing as the law requires; it is governed by the laws of Uganda; the courts of Uganda have jurisdiction; variation must be in writing.
Execution
SIGNED by the Guarantor: ____________ Date: ________
In the presence of — Witness: ____________ Name & address: ____________
Drafting notes
- Writing required
- A guarantee (a promise to answer for another’s debt) must be in writing to be enforceable (Contracts Act s.9(6)).
- Scope & limit
- State the Guaranteed Obligations and any monetary limit clearly, including interest and costs.
- Preservation
- Add preservation clauses so the guarantor is not discharged by variation, indulgence or release of security.
- Demand & subrogation
- Make it payable on demand and postpone the guarantor’s recovery against the debtor until the creditor is paid.
Execution requirements
- The guarantor signs, with a witness; a guarantee must be in writing (Contracts Act s.9(6)).
- Make clear whether it is a continuing guarantee and how it ends.
- Keep the executed guarantee with the security file.
Governing law & citations
Governed by the Contracts Act, Cap. 284 (2023 Revision), ss.9(6), 67–75.
- Contracts Act, Cap. 284 (2023 Revision) — ss.9(6), 67, 73.