Under any type of contract, a guarantor is a person (or persons) who guarantee payment to someone if the party to a contract fails to make payment. A guarantor is not a party to the contract, however, they are legally liable to make payment as if they were a party.
When entering into a building contract, if Person A (the home owner) is the party to the contract with the builder, and Person B is going to be making some or all of the payments under that contract, then it is wise for the builder to request that, in addition to Person A signing the building contract, Person B signs a separate Deed of Guarantee. This will allow the builder to legally chase Person B for payment if Person A fails to make payment under the contract. Without a signed Deed by Person B, the builder cannot legally chase Person B for payment.
This entry was posted on Saturday, February 27th, 2010 at 12:11 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.