käendaja

Käendaja (guarantor) is a person or organization that accepts responsibility to fulfill the obligations of another party (the debtor) to a creditor if the debtor fails to perform. The käendaja's commitment is typically set out in a written guarantee agreement and may cover a loan, lease, or service contract. A käendaja can be a private individual or a company; the arrangement is commonly used to enable credit or secure performance when a debtor's own creditworthiness is insufficient.

Liability: In most legal systems, the käendaja has secondary liability. This means the creditor must first seek performance from the debtor and only then claim from the käendaja. The exact scope—amount, duration, conditions—depends on the guarantee contract. A guarantee may be limited in time, capped at a fixed sum, or conditional on specific events. The obligation of the käendaja ends when the guarantee is terminated in accordance with the contract, for example by agreement or certain events.

Rights and risks: Being a käendaja carries financial risk and potential impact on personal or corporate finances. Before becoming one, parties should assess the debtor's reliability and the terms of the guarantee. After paying under a guarantee, the käendaja typically obtains recourse against the debtor (subrogation) and may claim damages if the debtor's breach involved fault.

Common contexts: In Estonia, as elsewhere, guarantees are frequently used in bank loans, rental agreements, and business contracts. Proper formalization and legal advice are advised to ensure clarity of obligations and remedies.