When companies interact with each other, as well as with private individuals, it often becomes necessary to draw up a letter of guarantee according to a certain sample. There are no specific requirements for such a document in the legislation, so each company has the right to choose one form or another. Read on to find out how to compose it correctly, as well as real examples of writing.
When drawing up, it should be borne in mind that regardless of the specific sample, this document confirms certain facts that are indicated in the text, for example:
- intention to sign an agreement (often a preliminary agreement is also drawn up for this purpose);
- bank account information;
- guarantees of fulfillment of certain obligations.
It is always signed by the head of the company. Along with it, the deputy can also sign, as well as any other official who is also responsible for the fulfillment of obligations (for example, the chief accountant).
NOTE. Regardless of the specific sample, the letter of guarantee is always printed out on the company’s letterhead, which contains contact information and the full name of the institution. As a rule, the company seal is also affixed to the document.
For correct preparation, you can follow any sample. The content of a specific document, as a rule, depends on the specific case, but should contain the following information:
- date of compilation and reference number, which is registered in the company’s special journal;
- the name of the recipient, as well as the full name of the general director of the company or other employee in whose name it is sent;
- the title of the document is usually the topic itself;
- then follows the text, which is compiled concisely and extremely specifically (as a rule, the entire text fits on 1 printed page);
- if documents are attached to the letter that confirm the fact of the guarantee, the “Attachments” section is filled out, indicating the name of these documents, their quantity and type (original or copy).
- at the end the position and surname, first name and patronymic of the employee who compiled it are indicated;
- Then the date and signature are placed.
NOTE. If an employee acts on the basis of a power of attorney, he indicates the details of this document and also attaches a copy of the power of attorney. In this case, the company seal is usually not affixed.
Kinds
At the moment, a certain writing practice has developed in business document flow, on the basis of which several types of this document can be defined:
Form and examples
In its simplest form, the sample includes only the most basic sections, namely:
- to whom is it addressed;
- who compiled it;
- content;
- date, signature and seal.
If we are talking about paying for a product that is currently being tested to make a final decision on purchase or refusal, you can use this sample.
In some cases, it has a different name, for example, “Loan Obligation Payment Schedule.” Then it is only important to register the repayment schedule - i.e. terms and amounts.
If an employer gives a guarantee to employ a citizen, the example would look like this:
Rules for compilation and design
Regardless of the specific sample, when compiling it, it is advisable to proceed from the following rules:
- The style of presentation is only formally businesslike.
- Volume no more than 1-2 printed pages
- It is undesirable to use complex syntactic structures in the text that make it difficult to understand.
- Any grammatical errors are unacceptable.
- Since the letter must guarantee certain actions that the party intends to perform, they should be written in a separate paragraph and highlighted in different ways (italics, bold or larger font).
- The text of the promise itself must be extremely specific - for example: “We promise to pay for the Internet connection service in accordance with the contract for paid services dated May 22, 2014, no later than November 30, 2017” (and not in November of this year) .
It is important to strengthen your guarantee by supporting it with appropriate documentary evidence, if possible.
Always compiled in 2 copies, each of which bears the signature of the General Director and a blue seal. One copy remains in the custody of the sender and is recorded in the document flow log.
Delivery methods
- in person together with the courier;
- by registered mail with return receipt requested;
- using a scan of a document via email - in this case, it is important to understand that the original that is scanned or photographed is sent.
It is not sent by fax, since in this case it is not always known how well it will be printed and whether it will reach a specific addressee.
Legal force
Regardless of the content of the text, as well as the sample on which it was drawn up, the document has legal force. However, specific responsibility is associated with those obligations that are indicated in the text:
- In most cases, it is drawn up as a declaration of intent that the company will enter into a contract in the future under certain conditions. Then it is considered that the legal entity has only expressed its intentions, which it can refuse. Therefore, in this case it has only an informative character.
- They are also drawn up in cases where the company confirms its intention to pay for a product or service for a certain period of time. It is imperative to provide links to specific agreements and other documents between counterparties.
- It is also drawn up for a bank when the company confirms the existence of debt obligations and the intention to make the next payment or repay the entire debt by a specific date.
In the last 2 cases, the company that has drawn up not only declares its intention to pay for a product, service or financial obligation, but also guarantees to do so within a certain period of time. Therefore, such a document has full legal force. Accordingly, the second party can use the letter as additional evidence if the need arises for a trial.
A letter of commitment is a business official document that is addressed from one party to the other in a partnership relationship. The text of the letter most often contains the intentions of one of the participants to fulfill their obligations to the partner.
In what cases is a letter of guarantee drawn up?
Letter of guarantee for work completion
This type of warranty is intended to confirm that the work agreed upon between the parties will be performed. The contractor draws up such a letter and provides it to the customer upon signing the contract. The form of the letter differs from similar guarantee documents in content. It sets out the essence of the obligations, and they must comply with the provisions of the contract:
- Number of the outgoing document and date of preparation.
- Recipient's name.
- Title.
- Contents: list of works that the contractor undertakes to perform, deadlines, link to the agreement between the parties.
- Information about the employer: company details, address, contacts.
If the obligations given by one of the parties are not fulfilled and the second party files a claim in court, the letter of guarantee will also be considered as indirect evidence of the existence of unfulfilled obligations.
Get a lawyer's answer in 5 minutes
A letter of guarantee for payment is a document in which one of the parties to the transaction confirms its intention to pay (in the near future) for the goods or services received. Simply put, such a letter is a way of securing financial obligations. Not the most reliable, but popular and quite effective.
In what cases should I write?
The most common scenario: an entrepreneur urgently needs to purchase a new batch of goods or use some service, but his financial situation does not allow him to pay immediately. It doesn’t matter - you can ask your counterparty for a deferment. If he agrees, the businessman will simply write a letter of guarantee for him. This is a common practice in cases where both parties have been cooperating successfully for a long time (and, accordingly, are confident in each other’s integrity).
Very often, a letter of guarantee becomes a response to a letter of claim. Let's say you ordered a product or service from a seller (performer), but there were problems with payment. Naturally, the seller will send you a claim demanding payment as quickly as possible. Unpleasant situation. But what if you can’t give away the money right now? That's right, write a letter of guarantee. Even if your counterparty prefers real money to any messages, he will probably be satisfied at first with this letter (and at least will not immediately go to court).
Decor
The law does not clearly say how to write a letter of guarantee about payment, and there is no special form for such messages. If the guarantee is drawn up on behalf of a legal entity, then it must be written on company letterhead. In this case, in addition to his signature, the manager will also have to put a seal. But individual entrepreneurs (and individuals, that is, ordinary citizens) can draw up this document on a regular sheet of paper.
The list of required details looks like this:
- the number of the outgoing letter and the date of its composition;
- information about the sender (company name, full name of the entrepreneur);
- information about the recipient - the name of the organization (full, not abbreviated) and the full name of its director, for whom the guarantee is intended;
- title – here you can simply indicate the subject of the message; the title “Letter of Guarantee” is usually not written.
Instead of writing the sender's information manually, you can put a company stamp (if you have one).
What to write in the text?
The text of the letter usually consists of four short parts:
- first, the entrepreneur indicates what financial obligations he undertakes to fulfill;
- followed by a mention of the period during which he plans to do this (specific or approximate);
- Bank details are required - the account number from which the payment will be made;
- finally, penalties are mentioned in case of violation of the obligations assumed by the entrepreneur (this clause is not mandatory; it is not always included in the text of the guarantee).
The following template wording and introductory phrases can be used in the text:
- We guarantee;
- By this letter we guarantee;
- The company LLC "So-and-so" guarantees;
- We guarantee timely payment in full;
- We hereby guarantee.
An important point: if you are the head of a company (that is, a full-fledged legal entity), then it is advisable that the letter of guarantee is also signed by your chief accountant. If you are an individual entrepreneur, then put only your signature.
When preparing and writing a letter of guarantee for payment, consider several recommendations.
- Write the text in simple, clear, concise phrases. The simpler the document is written, the better - this way it is guaranteed that there will not be any unclear provisions that can be ambiguous.
- If you have to write letters of guarantee often, create a unified template for yourself so that you don’t have to rewrite the message from scratch every time.
- If desired, the letter of guarantee can be drawn up in more detail than was indicated in the above diagram. No one forbids you to write down as specifically as possible exactly which days you are going to pay, at what time intervals, why, etc. But do not overdo it - the text should fit on one sheet.
- Always indicate your current account. The recipient must know “where” exactly the payment is coming from.
- You can additionally attach various documents to the letter if required by the counterparty. This could be a Certificate of state registration of your company (or individual entrepreneur), an extract from the Unified State Register of Legal Entities, an order for the appointment of a general director, etc. You do not need to attach any of this on your own initiative.
It is worth saying more about the clause about liability for failure to meet payment deadlines. In essence, letters of guarantee are promissory notes. Accordingly, they should indicate liability for non-payment and delay (at least in theory). For this purpose, indicate in a separate line the procedure for calculating “penalty” interest for each day of delay.
However, this clause is not always used. Sometimes a manager forgets about it unintentionally (it is not mandatory), sometimes intentionally (because no one wants to voluntarily increase the burden of their responsibility). It happens that the other party believes in the integrity of the entrepreneur and does not want to overshadow the cooperation by scrupulously prescribing interest, fines and other “usurious chips”. You need to understand two things:
- even if this is not stated separately, it is possible to collect interest on late payments (according to Article 395 of the Civil Code);
- but you won’t be able to get much - the fine is limited to 0.3 percent for one day of delay.
In addition, without a clause on the procedure for calculating penalties, even this 0.3 percent cannot be simply obtained - the other party will have to go to court and take a long time to prove that this case falls under the provision of additional payment for the use of someone else's money.
In a word, if you do not write, but receive a letter of guarantee about payment, immediately prepare a sample for the counterparty, which will include a clause on debt collection (see sample below). If you are composing the letter yourself, try to delicately omit this part. This is not entirely correct from a business point of view, but why do you need unnecessary (albeit unlikely) problems?
Compilation example
A classic letter of guarantee looks something like this (we provide only the text, without details):
“We ask you to send us the next batch of products in accordance with application No. 1753 dated July 20, 2015.
By this letter we guarantee that payment in the amount of 30,000 (thirty thousand) rubles will be made by us before September 1, 2015.
In case of non-payment in the prescribed amount within the prescribed period, this letter of guarantee should be considered as confirmation of the fact that our company has received a commercial loan for the amount of products supplied. In this case, for each day of late payment, an additional amount of 1% of the amount of overdue obligations will be charged.
Our bank details:
OJSC AKB Uralsib, St. Petersburg.
r/s No. such and such.”
Download a sample payment guarantee letter.
As you can see, everything is quite simple. The most important issue is related to the delay, and now you know how best to solve it. And remember - a letter of guarantee does not create one hundred percent legal guarantees of fulfillment of obligations. This is just an analogue of an IOU, nothing more.
The purpose of letters of guarantee is to provide written guarantees to the addressees. They confirm the agreed conditions or promises, intentions or actions of the sender related to the interests of the addressee.
Letters can be addressed to an individual or organization. They are a document containing guarantees, even if the word “guarantee” itself is not present in the text. Such letters may confirm the timing of work, payment for work performed or products received, the quality of goods supplied or work performed, delivery times, etc. Such clauses are necessary in cases where one party is not confident in the implementation of the agreement.
These points constitute the content of the letter or are a component of it. The letter of guarantee is of a legal nature and its status corresponds to documents of a contractual nature (additional agreement, contract, etc.).
Letters are often provided to confirm payment has been made. Here they indicate a link to the account number or agreement on the basis of which payment should have been made. In addition, letters serve as a document for third parties and are accepted by the bank as collateral for a loan (they confirm that the addressee has received the necessary amount to repay it).
For example, when registering legal entities, a letter of guarantee is sufficient to provide a legal address, since it is impossible to conclude an office lease agreement.
The document is distinguished by accuracy, clarity and unambiguous wording, since it talks about the provision of guarantees on behalf of or on behalf of an official or organization. It indicates the type of operation or complete procedure that will be performed.
Letters begin by stating the essence of the guarantees provided to the addressee, for example:
With this letter we guarantee......
In other cases, they contain a statement of reasons why the author declares his willingness to provide certain guarantees to the addressee. Here the statement is contained in the final part, for example:
We guarantee full and timely payment
A characteristic feature of the document is that, along with the signature of the director (author), there is the signature of the official responsible for managing financial and other monetary matters. When sending a letter as an obligation to pay for a service rendered, a purchase, etc. The text indicates the bank details of the paying company.
Characteristic phrases of the letter:
- We guarantee...
- We hereby guarantee...
- The company "Name" guarantees...
- Payment on time... we guarantee... etc.
Letters of guarantee are drawn up according to general drafting rules.
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