1.23 Suretyship.doc (6 pages)

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Used when a third party undertakes to pay a debt if the debtor defaults. Our law attaches special significance to such documents and requires that they must be in writing and must be complete in all respects (e.g. the full name of the Debtor must be inserted) at the time it is signed, otherwise it is invalid. Section 6 of the General Law Amendment Act 50 of 1956 deals with formalities in respect of a suretyship. It states that no contract of suretyship entered into after the commencement of this Act shall be valid unless the terms thereof are embodied in a written document signed by or on behalf of the surety. The signing of a suretyship leaving blank spaces for later completion does not constitute compliance with said Section 6. This is a point regularly and successfully taken by evasive sureties to invalidate their obligations. Suspicious suretyships should be re-submitted for proper signature and completion. The full designation of juristic persons must be given e.g. (Pty) Ltd or cc.