The Meaning Of A Guarantee And A Contract For The Provision Of Guarantee In Ensuring The Fulfillment Of An Obligation

Abstract

According to the Civil Code of Ukraine, under a guarantee as a type of security for the fulfilment of an obligation, a bank, other financial institution (guarantor) guarantees to the creditor (beneficiary) the fulfilment of its obligation by the debtor (principal). The legal relationship of the guarantee has a complex legal nature. On the one hand, to issue a guarantee, the debtor must apply to the guarantor with a statement, which is considered by the guarantor, and in case of a positive decision, a guarantee is issued. In this case, the relationship arises between the guarantor and the creditor (from this point of view, the guarantee is considered a unilateral transaction). Such a transaction is free of charge, as the guarantor does not receive any sums of money in his favour from the beneficiary. However, the guarantor has the right to pay for services rendered by him to the debtor, as well as a return (recourse) to the debtor within the amount paid by him under the guarantee to the creditor, unless otherwise provided by contract between the guarantor and the debtor. In this case, we are talking about the conclusion of a guarantee agreement (the relationship arises between the guarantor and the debtor). With regard to the Civil Code of Ukraine, the rules governing the possibility of applying a guarantee do not provide for the mandatory conclusion of a contract for the provision of a guarantee for the issuance of a guarantee. Although other acts of civil law either explicitly state the need to enter into such an agreement, or that the guarantor has the right not to enter into a separate guarantee agreement, if the statement of guarantee provides all the conditions under which the guarantee is provided, and this statement agreed with the guarantor and has the force of a guarantee agreement. In this regard, it is proposed to make appropriate amendments to the Civil Code of Ukraine. Therefore, the guarantee can be issued as a separate, independent transaction, or contained in the contract, depending on the requirements of the law and the wishes of the parties. In this regard, we propose to supplement Article 560 of the Civil Code of Ukraine, part two and amend to read: «The guarantee can be drawn up as a separate document or be a constituent part of the contract on the provision of a guarantee».