Alberta Law Update: Personal Guarantees
A Guarantee is a promise to be liable for the debts of another person. When banks make loans to corporations, they often add guarantees in to create personal liability for the owners or shareholders. Also when banks add parents or others as co-signors for loans to children these are guarantees.
The law in Alberta contains a unique wrinkle, however. Alberta has the Guarantees Acknowledgement Act. The Act requires that for a guarantee to be enforceable it must be signed in front of a lawyer, who must sign a certificate in the form set out in the Act. Failure to do so can make the guarantee unenforceable.
Guarantees are sometimes found in commercial leases, and tenants who are in breach (particularly in covid times) are advised to check their guarantees.
There are a number of nuances to the law of guarantees that are beyond the scope of this particular article.
If you have signed a guarantee and wish to know whether it is enforceable, or have some other guarantee-related question, please feel free to contact us.
The information contained in this article is not legal advice. No solicitor client relationship is formed through this article. The reader is encouraged to retain counsel for advice in these matters.