Guarantees and indemnities

Welcome to Francis Wilks & Jones, the country’s leading firm of advisers in respect of guarantees and indemnities. Over the years our team has dealt with many financiers and are experience in the whole area of guarantees and indemnities. Our expertise is second to none. Please contact one of our friendly solicitors now on 020 7841 0390 and we will be happy to help..

1. What is an indemnity?

People often ask us “what is an indemnity?” Most commercial finance agreements and invoice finance agreements, whether relating to invoice discounting or invoice factoring, will be supported by an indemnity of some kind. These may be limited or unlimited, and can be included within the finance agreement, or within a separate document, often alongside a guarantee. As a director of a company, before entering into any documentation, it is essential to understand the nature of the guarantee and/or indemnity and the extent of the liability that the business, or you personally, are committing to.
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2. What does indemnity mean?

We are often asked “what does indemnity mean?” In the commercial finance context an indemnity is a promise to compensate someone for losses caused to them by either that party or a third party. An indemnity is often found within a guarantee and indemnity document a loan or finance agreement, or other type of contract. When entering into a guarantee or indemnity, or an indemnity, it is important to first understand the underlying obligations and the extent of liability under the indemnity.
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3. What is an indemnity arrangement?

People often ask “what is an indemnity arrangement?” In the commercial finance context lenders and financiers often require an assurance from a third party that they will be compensated for loss suffered as a result of a failure to pay by the business to which finance has been provided. Usually, this manifests in the form of a personal or corporate indemnity from stakeholders in the business taking the commercial finance loan.
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4. What is a deed of guarantee and indemnity?

“What is a deed of guarantee and indemnity” is an important question to ask before signing any such document. A deed of guarantee and indemnity is a serious document and signing one can have serious consequences. Seeking independent legal advice is key and the team at Francis Wilks & Jones is here to help.
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5. What does bank guarantee mean?

Often businesses want to undertake trade with other businesses but in order to do so need to agree to trade  on terms allowing them time to make payment in order that they can sell goods on for profit and cash with which they can pay for their supplies. However, the supplier may not be comfortable to supply at the amount required by the buyer or on those terms and require cash on delivery or short credit terms, which would cause cash-flow problems for the buyer. To alleviate the fears of the seller and secure their preferred terms the buyer may offer a bank guarantee. This is a guarantee from the buyers bank to the supplier whereby the bank is obliged to pay the supplier if the buyer should not.
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