Does the guarantee have legal effect on paying back the money?

Does the repayment guarantee have legal effect?

The repayment guarantee has legal effect, but a valid guarantee must meet the following three conditions at the same time:

1 is a reflection of the true wishes of the parties. The content of the letter of commitment shall be the expression of the true meaning of the parties, and shall not be forced, threatened, lured or deceived.

2. No violation of relevant laws and regulations; The content of the letter of commitment must comply with the provisions of the law and cannot violate the prohibitive provisions of laws or administrative regulations, otherwise it may lead to the invalidity of the letter of commitment.

3. Do not infringe upon the interests of others. The promisor can only dispose of what he has the right to dispose of, but not infringe upon the legitimate interests of others.

Matters needing attention in repayment guarantee

First, clearly explain the reasons for the arrears.

First of all, the reasons for the arrears must be made clear, and the amount of arrears cannot be simply written directly. The reasons for the arrears should be explained in detail. What is the reason for the arrears? * * * How much principal is in arrears? How much or how to calculate the interest? How much or how to calculate the liquidated damages? When should the repayment be made, and when will it be postponed now? Is it a one-time repayment or installment repayment? Wait a minute. The more detailed you are, the more operational you will be. For example, in the original loan agreement, the interest of the loan term and the interest of overdue repayment were clearly agreed, but in the repayment commitment, only the principal amount of the loan and when to extend the repayment were stated, and no interest was agreed. Because there is no agreed interest, the court may conclude that the repayment promise has changed the original loan agreement, and now the loan is interest-free. In this way, the interests of creditors will be harmed, so we must make it clear why we owe money.

Second, agreed liability for breach of contract

Whether or not to breach the contract, sometimes we consider not morality, honesty and contract spirit, but the cost of breach of contract. If the cost of breach of contract is small, or even more profits can be obtained from breach of contract, this will encourage breach of contract, and people's profit-seeking nature will choose to breach of contract.

In the case that there is no liability for breach of contract or the cost of breach of contract is very small, the other party still abides by the contract, which may be due to the strength of good faith and morality or the consideration of long-term cooperation interests in the future. However, relying on morality to abide by the contract has great uncertainty in a society with lack of integrity. Set strict and effective liability for breach of contract, even if the debtor's morality is not so noble and has no consideration for the long-term interests in the future, he will choose to keep the contract for money.

The repayment guarantee written by the debtor has legal effect, but it is a reflection of the true wishes of the parties. The content of the letter of commitment shall be the expression of the true meaning of the parties, and shall not be forced, threatened, lured or deceived. There are other related questions to know. Welcome to consult free legal advice.