The supplier form asks for an indemnity as well as a guarantee
Identify separately drafted indemnity and guarantee promises in a supplier application and seek advice on their interaction rather than assuming a guarantee cap or defence covers every clause.
Corporate Recovery Partners
01 / 06
The heading may describe only part of the document
The supplier asks you to sign what everyone calls a guarantee. Inside the form, a separate section also asks for an indemnity. Bring both provisions to independent legal advice before signing. Do not assume different labels describe the same promise, or that an answer about one clause necessarily explains the effect of the other.
Locate the personal-signature section and every clause it refers to. Mark the guarantee, indemnity, costs and security wording for the adviser without trying to interpret them in isolation. Ask for missing terms. A summary from sales staff may be useful background, but it does not replace the actual document proposed for your signature.
Business.gov.au recommends clear contracts and explanations of terms that are not understood. Ask your lawyer what each personal promise does, how they interact and what circumstances could trigger payment. This article does not define their effect in your particular form. The answer depends on the wording and applicable law, rather than the supplier's informal description of the package.
Imagine a proposed guarantor seeing a dollar figure near one clause and assuming it limits every personal obligation in the form. Another provision addresses different amounts or costs. Ask whether the limit applies across the complete undertaking. The example identifies a review question; it does not establish that the extra clause defeats a cap or necessarily creates unlimited liability.
If you seek a change, have the adviser assess whether related wording also needs adjustment. Do not cross out one heading and assume the remaining promises now have the intended effect. Confirm what version the supplier accepts before relying on a negotiated position. Keep purchasing staff informed so they do not represent unresolved personal terms as an approved account.
Decide whether to proceed after the full commitment has been explained, considering the business's needs and your own circumstances. Retain the final documents and advice appropriately. The immediate task is to identify all the promises being requested, rather than allowing the familiar word guarantee to hide a second provision that has never been considered.
