Landlords are often insistent on procuring personal or other forms of guaranties1 when entering into a lease with a tenant. Unfortunately, however, while much time and effort is often spent on securing the form and material terms of the guaranty, landlords and their counsel are well advised to make similar efforts to take the necessary precautionary steps to ensure that the guaranty they worked so hard to acquire can indeed one day be enforced in the event of default by the principal debtor.
The first principal of law that the drafter of the guaranty must keep in mind is that of strictissimi juris, to wit, a guaranty of another person’s compliance with his or her contractual obligations is generally interpreted in the strictest manner.2 In addition, where the guarantor is a private party rather than a commercial entity, the application of this rule in the guarantor’s favor is all the more particularly enforced.3 Thus, if the guaranty does not specifically allow for the recovery being sought by the landlord/creditor, the courts will generally interpret the guaranty in a fashion that is generally favorable to the guarantor in the event of a dispute.
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