Also known as a payment guarantee form, a personal guarantee form is a legally binding document that confirms the intent of a buyer to remit payment to a seller, based on the terms and conditions that are found in the text of the document. Depending on the format used, a form of this type may also include a commitment from a co-signer who agrees to be responsible for the debt if the buyer does not settle the balance in a timely manner. A personal guarantee form may be included in a larger contract, or be prepared as a standalone document that is signed at the same time as the contract.
The purpose of a personal guarantee form is to protect the interests of both the buyer and the seller. For the buyer, the text included in the form states the terms of payment, including the assessment of late fees or penalties in the event that a payment is delayed. While this detail may be included elsewhere in a service contract, the presentation in this form helps to ensure that the buyer does understand the conditions for payment, as well as the consequences if payments are not made according to the agreed upon schedule.
For sellers, a personal guarantee form is structured to comply with any laws or regulations that apply to written agreements in the area where the seller is located. The concise verbiage used with most versions of this form provide the seller with additional assurance that he or she has done everything possible to inform the buyer of what is expected. By minimizing the chance for misunderstandings regarding the remittance of payments and any late fees that may apply, the seller is confident that the business relationship will go smoothly and that the terms of the contract will be fulfilled on time.
There is no one version of a personal guarantee form that is right for every situation. Fortunately, it is possible to make use of many different templates that can be adapted to fit the needs of the seller and still comply with local laws. While it is possible to purchase these templates, there are a number of free versions found online. These free versions can be downloaded into different word processing format and easily restructured to encompass any specific circumstances or data that is applicable to a given transaction. In addition, the text of several templates can be combined to create a document that covers every concern surrounding the payment for goods and services rendered, allowing both buyer and seller to be comfortable with the terms associated with the guarantee.