Drafting Effectively - Guarantees

Develop a core set of practical principles for drafting and negotiating guarantees effectively across a range of scenarios.

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A half-day course

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Guarantees: One of the Most Litigated Forms of Documents

Mainstream ‘market’ guarantees vs other guarantees
Why are bank standard forms used?
Why are guarantor standard forms used?
What are the pitfalls in using standard forms?
What can go wrong when negotiating standard forms?
What difficulties arise in practice when confronted with an unfamiliar guarantee document?
What gives rise to drafting errors?
How this shapes the guarantees approach
Case law examples - Triodos Bank NV v Dobbs

Using Guarantees as a Form of Insurance: Improving Drating and Negotiation Approaches

The role of a guarantee in a transaction
The insurance comparison
Why do people take out insurance?
Why do businesses take out insurance?
What’s hidden/missing in the insurance small print?
What’s hidden/missing in the guarantee small print?
Acquiring an eye for detail – the insurer and the insured’s mindset
The six-billion-dollar question for all guarantees

Why is There Never a One-Size-Fits-All Guarantee?

What are the main types of guarantees?
How they differ
When a ‘guarantee’ is not a guarantee – why it’s what it says on the tin that matters – understanding ‘guarantee jargon’
Why understanding different guarantee types is important for drafting purposes

Questions You Must Consider Before Drafting or Reviewing any Guarantee

Examining the commercial rationale for guarantees and how that could affect your drafting
Considerations when examining the scope of a guarantee
Suitability of the guarantor – key issues
Testing the limits – how far does a guarantee stretch & what are its limits? The principles from Holme v Brunskill & issues of the purview
‘Best before’ dates – do you know when a guarantee may be worthless?
Competing interests
How might other documents impact?
Taxing issues and the question of set-off
Down at the bureau de change – why currency matters
Guarantee amendments
When is a release a release? Wulff v Jay and other cases
Alternative methods of comfort – are they of any use?

Should You Consider a Guarantee Term Sheet?

What’s the purpose of a term sheet – why could it help with guarantees?
Guarantees on non-financial transactions
What could a guarantee term sheet look like?
How a term sheet helps through the drafting and negotiation process
Arguments for not having a guarantee term sheet

Reviewing Guarantees: Drafting Bear Traps

Who is drafting?
What document are you starting with?
Recitals – why might they be important?
Definitions
The guarantee clause itself
Guarantor rights & defences (including First National Finance v Goodman)
Joint and several liabilities – Ellis v Emmanuel
Duration and Discharge
Liability caps - Re Rees Ex p. National Provincial Bank of England
Making a claim – examining the hoops to jump through
Preserving rights under the guarantee
Immediate recourse
Continuing obligation language
Double recovery
Enforcement - Governing law and jurisdiction - Ms X v. Banque Privée Edmond de Rothschild
Unfair Contract Terms Act 1977
Resurrection of guarantees

The Impact of Other Documents/Transactions on Guarantees

Other guarantees
Security
Intercreditor and priority agreements
Facility agreements
Other agreements

Distinguishing Between Legal and Commercial Risk in the Context of Guarantees

What’s my remedy?
Legal factors affecting the remedy
Commercial factors affect the remedy
The crystallisation of legal risk into economic loss

Please be advised that this training course does not constitute legal advice & should not be relied upon as such. Nor can the trainer give legal advice to participants during the sessions.

Redcliffe’s trainer is a highly experienced lawyer, educator and writer. For almost 30 years across several industries, he has written and delivered a wide range of bespoke training for individuals, businesses, professional associations and educational establishments.

He has advised banks, alternative lenders, asset finance houses, borrowers, private equity houses, guarantors and pension trustees on a wide range of UK and cross-border banking and finance transactions. These have included syndicated investment-grade and global loans, leveraged finance acquisitions, real estate investment & development finance, asset and receivables finance, forward-flow transactions, bridging finance, securitisations, social housing finance, higher education finance, and general corporate borrowing. He has also advised on restructurings and complex intercreditor arrangements and drafted and reviewed reports/certificates on a wide range of real estate transactions.

This specialist is currently a partner with law firm Gunnercooke LLP. He completed his formal training, qualifying as a banking & finance solicitor in Leeds with the law firm, Cobbetts LLP in 2005. He moved to London in 2007 to continue his career at Denton Wilde Sapte LLP (now Dentons) and subsequently with Wragge & Co LLP (now Gowling WLG (UK) LLP).

He moved to an in-house counsel role at Barclays Bank PLC in 2010, working in their Trade & Working Capital team, advising on a wide range of UK and international receivables finance, inventory finance, securitisation and other asset finance matters (including invoice discounting, factoring, recourse and non-recourse financing, selective receivables finance, supply finance and full asset-based lending agreements).

Our expert has worked on secondment with the HSBC (UK) Invoice and Equipment Finance legal and business teams, advising on UK and cross-border asset-based lending transactions, including hire purchase, lease finance and asset purchase finance.

From 2015 to 2023, he was a professional support lawyer in the banking & finance team at Gowling WLG (UK) LLP. He was responsible for education & training, briefing notes, precedents, legal technologies and providing advice across the firm and its international offices on complex areas of law. He has also written and delivered training for several professional associations, including the Loan Market Association and the American Intellectual Property Law Association.

Understanding why guarantees are so often the subject of litigation
How looking at guarantees as a form of insurance helps the approach to drafting and negotiation elements
Determine that there is never a one-size-fits-all guarantee
Considerations of a guarantee term sheet
Necessary questions to consider before drafting or reviewing any guarantee
Getting to grips with guarantee jargon – guarantee vs. undertaking vs. indemnity
Discover significant bear traps in guarantee drafting
Determine the impact of other documents/transactions on guarantees
Distinguishing the legal and commercial risk of guarantees

Case law and exercises may be used to highlight particular issues.

Sessions are not a clause-by-clause page turn of a guarantee. By examining fundamental drafting principles and how guarantees fit together commercially, training helps you acquire core key principles to apply and adapt to different guarantee scenarios.

Training is a ‘must know’ for:

Lawyers new to drafting, reviewing and negotiating guarantees. This session provides the essential foundations and core principles to help you approach the process effectively and with confidence

This course is also a ‘nice to know’ and useful refresher for:

Lawyers looking to revisit these skills or improve their ability to explain the mechanics of a guarantee and the impact of drafting in plain English

Guarantees are one of the most litigated forms of documents. With increased pressure on lawyers to provide even more excellent value for money, understanding how to draft guarantees effectively is a crucial part of every banking & finance lawyer’s toolkit.

Sessions are essential for lawyers involved in reviewing, negotiating, and drafting changes to guarantees, whether working for lenders or other commercial parties.

Training is aimed at lawyers looking to better understand guarantee mechanics, improve drafting skills and negotiate effectively with greater confidence. It’s also aimed at lawyers wishing to explain the impact of guarantee drafting in plain English - a vital skill in the 21st century.

This course is suitable for individuals requiring a refresher on the principles of guarantee drafting.

I liked the interactivity of the questions being asked and answered.
I'd expected something more to do with technical black letter law and was pleasantly surprised when the content turned out to be far more hands-on/practical. The trainer's delivery was excellent.

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