Discharge of Guarantees – The Doctrine of “Purview of the Guarantee” – Is There a “Get Out of Jail Free Card” For Guarantors? – Littleton Chambers

Posted July 10th, 2013 in construction industry, contracts, guarantees, news, summary judgments by sally

“Well–drawn guarantees contain comprehensive ‘anti-discharge’ provisions, designed to prevent a guarantor being discharged from liability by any post-guarantee amendments to the principal transaction or extensions of time to pay or other indulgence given to the principal debtor without the guarantor’s knowledge or consent. This right to be discharged is generally known as the rule in Holme v Brunskill (1878) 3 QBD 495) after the leading case that set out the mature principle. Banks and others have continuously refined these ‘anti-discharge’ provisions to try to make sure that the rule in Holme v Brunskill is stripped of its effect.”

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Littleton Chambers, 9th July 2013

Source: www.littletonchambers.com