käenduselepingul

A käenduselepingul, often translated as a suretyship agreement or guarantee contract, is a legal arrangement where one party, the guarantor or surety, promises to fulfill the obligations of another party, the principal debtor, to a third party, the creditor, if the principal debtor fails to do so. This contract serves as a form of security for the creditor, ensuring that they will not suffer a loss if the primary obligor defaults.

The käenduselepingul is typically a written agreement, and its validity often depends on specific legal requirements of the jurisdiction. Key elements include the identification of the principal debtor, the creditor, and the guarantor, as well as a clear description of the obligation being guaranteed. The extent of the guarantor's liability, whether it is for the entire debt or a portion thereof, and the duration of the guarantee are also crucial components.

There are different types of suretyship. Primary suretyship exists when the guarantor is directly and primarily liable along with the principal debtor. Secondary suretyship, more common, means the guarantor's liability is secondary to that of the principal debtor, and the creditor must usually pursue the principal debtor first before seeking recourse from the guarantor.

In essence, the käenduselepingul transfers the risk of default from the creditor to the guarantor. The guarantor, in exchange for undertaking this risk, may receive compensation or benefit from the relationship with the principal debtor. However, it is a significant commitment that can lead to financial hardship for the guarantor if the principal debtor defaults.