Guarantees and Sureties

• By virtue of a guarantee the guarantor shall become liable to the creditor of another person (debtor) jointly and severally in full or in part for the execution of obligations of that person, except for the cases provided for by legislative acts.

• By virtue of a surety, the holder of the surety assumes the obligation before the creditor of any other person (debtor) to be severally (additionally) for the execution of that person's obligation in full or in part.

Form of agreement

• A guarantee and a surety shall arise on the basis of surety or guarantee agreements

• Guarantee or surety agreements must be made in writing. Failure to comply with the written form shall render an agreement of surety or guarantee invalid.

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Advance Payment

• A sum of money which is issued by one of the parties to an agreement, at the expense of the payments, which are due by it in accordance with the agreement, to the other party and in order to secure the conclusion and the execution of the agreement, shall be recognized as an advance payment.

Form of agreement

• An advance payment agreement irrespective of the amount of the advance payment must be concluded in writing.

• This rule shall also apply in the case where the principal obligation must be notarized.

• The failure to comply with the written form shall entail invalidity of the advance payment agreement.

Use of advance payment as for securing obligation

• When the failure to execute an obligation is the responsibility of a party which issued the advance payment, it shall remain with the other party

• If the party which received the advance payment is the guilty party, it shall be obliged to pay to the other party a double amount of the advance payment.

Withholding

• A creditor, who have an object, which is subject to transfer to the debtor or the person, indicated by the debtor, shall have the right to withhold it, until respective obligation would not be fulfilled.

These rules shall be applied, unless otherwise provided by the agreement.

Guarantee Fee

• Sum of money transferred for securing the agreement obligations during deal-making process or conducting another obligation, shall be recognized as the guarantee fee.

• Obligation to pay for the guarantee fee shall arise in the cases provided by the legislative acts.

• Obligation to pay for the guarantee fee shall also arises by virtue of agreement of the parties.