Guarantee limitations meaning

Legal issues This checklist sets out the main terms and matters to bear in mind when preparing and negotiating indemnity provisions in commercial (business-to-business) contracts. For model wording with drafting notes, see Precedent: Indemnity clause-commercial contracts. For more on indemnities, consult the following Practice Notes: Indemnities in commercial contracts Guarantees and indemnities-general contract For a practical guide to reviewing an indemnity clause in B2B agreements, see Practice Note: How to review an indemnity clause. General comments What to watch out for Is an indemnity appropriate? An indemnity is a contractual promise by one party to reimburse the other for specified loss or damage or, in some instances, to relieve them from liability. Unlike a guarantee, it imposes a primary obligation that may not rely on a third party’s default. Assess if an indemnity is the right mechanism or whether a guarantee is preferable, for example where a parent company guarantees a subsidiary’s obligations. If advising the indemnifier, consider...

Loan market and developments Overview Broadly, Scotland’s loan market mirrors that of England. Financial services regulation operates on a UK‑wide basis; a substantial body of legislation governing companies and other corporate vehicles (including corporate insolvency) likewise applies across the UK; and all Scottish clearing banks conduct business in every UK jurisdiction, as do their counterparts across the UK. In practical terms, this means English law governed loan documents typically require minimal amendment for UK cross‑border lending transactions. There are, however, some differences in terminology and certain statutory variations that must be allowed for; beyond those matters, an English law loan document and a Scots law loan document are closely aligned. It is commonplace, for example, for English law loan agreements to be deployed in Scottish lending transactions. The principal divergences between the jurisdictions arise in relation to property law and to the law concerning rights in security, where Scots law and English law are notably distinct. Lending Is it necessary to secure any consents or licences to...

This Practice Note highlights the principal points to weigh up when acting for an outgoing tenant and advising on the assignment of a rack rent (occupational) commercial lease. See also Practice Note: Transferring commercial property—a practical guide, together with the Assignment of a rack rent lease (assignor)—checklist. Is the landlord’s consent required to the assignment? Carry out the following checks in sequence, in particular: Carefully scrutinise the lease terms, together with any deeds of variation and, where necessary, any other supplemental documents. If the lease is registered and contains HM Land Registry prescribed clauses, the register will confirm whether or not the lease includes provisions that restrict or prohibit dispositions, as shown by clause LR8 of the lease. Consider whether a restriction has been entered on the title expressly barring assignment without the landlord’s consent. Where relevant, review any superior lease carefully to establish if assignment is constrained—for example, a prohibition on assigning an underlease without consent...

Loan market and developments Please provide a succinct outline of the current condition of the loan markets in your jurisdiction and any noteworthy recent developments. The US corporate loan market remains a significant pillar of the US economy. While the US loan market has undergone considerable change in recent years, it is still resilient and continues to be one of the most inventive and consequential areas within the US capital markets. Two principal components of the US corporate loan space are broadly syndicated loans (BSL) and private credit transactions. The BSL segment is a key funding source for medium- and large-sized companies, comprising loans where multiple banks and non-bank financial institutions extend finance through a syndicate of lenders. Private credit typically involves lending by non-bank lenders on a bilateral basis or by a small cadre of lenders (often termed ‘club deals’). Both segments have seen strong growth and transformation over the past several years. Broadly Syndicated Loans Although private credit often captures more media focus, syndicated lending...