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Chapter Law Content

Title: Civil Code CH
Category: Ministry of Justice(法務部)
Part Ⅱ Obligations
Chapter II Particular Kinds Of Obligations
Section 24 - Guaranty
Article 739
A guaranty is a contract whereby the parties agree that one of them shall be bound to satisfy the obligation, when the debtor of the other party fails to perform same.
Article 739-1
Unless otherwise provided by this section, the rights of the guarantor provided in this section shall not be waived beforehand.
Article 740
Unless otherwise provided by the contract, the guaranty shall include the interest on the principal debt, the penalty, the compensation for the injury, and other accessory charges.
Article 741
In case the liability of the guarantor is heavier than that of the principal debtor, it shall be reduced to the level of the principal debt.
Article 742
The guarantor is entitled to take any defense that is open to the principal debtor as a valid defense.
He may still take such defenses as valid defenses even if they are waived by the principal debtor.
Article 742-1
The guarantor may take the principal debtor's claim against the creditor as his claim to offset.
Article 743
A guaranty given for an obligation which is invalid on account of debtor's lack of capacity to make juridical acts is still valid, if the guarantor binds himself in spite of the knowledge of the fact.
Article 744
If the principal debtor has the right of revoking the juridical act upon which the debt is founded, the guarantor is entitled to refuse to perform the obligation.
Article 745
A guarantor may refuse performance to the creditor, so long as the creditor has not filed proceedings for compulsory execution, against the property of the principal debtor, without results.
Article 746
The guarantor shall not assert the right specified in the preceding article in any of the following cases:
(1) If the guarantor has waived his rights specified in the preceding article.
(2) If the principal debtor has been declared bankrupt.
(3) If the property of the principal debtor is not sufficient to satisfy the obligation.
Article 747
A claim for performance and other acts which interrupt prescription made against the principal debtor operates against the guarantor.
Article 748
Unless otherwise agreed upon by the contract, when several persons act as guarantors for one and the same debt, they are joint-guarantors for the said debt.
Article 749
After guarantor has satisfied the creditor, to the extent of the performance, he is subrogated to the claim of the creditor against the principal debtor, but he shall not exercise it to the detriment of the creditor.
Article 750
If the guarantor has assumed the guaranty by reason of a mandate of the principal debtor, the guarantor may request the principal debtor to procure his discharge from the guaranty under any of the following cases:
(1) If the property of the principal debtor has obviously decreased.
(2) If, after the conclusion of the contract of guaranty claims for performance against the principal debtor have become difficult on account of change of his domicile, or his business office, or his residence.
(3) If the principal debtor is in default.
(4) If the creditor has obtained a non-appealable judgment entitling him to compel the guarantor to perform.
If the principal obligation is not yet due, the principal debtor may give security to the guarantor instead of discharge of obligation of guaranty.
Article 751
If the creditor waives the rights in rem on which his claim is secured, the guarantor is released from his obligation to the extent of the rights which have been waived.
Article 752
If the guaranty has been given for a definite period of time, the guarantor is released from his obligations, if within such period the creditor fails to enter judicial proceedings against the guarantor.
Article 753
If the guaranty is given for an indefinite period of time, the guarantor may, after the maturity of the principal debt, fix a reasonable period of not less than one month and request the creditor to enter judicial proceedings against the principal debtor within such period.
If the creditor fails to enter judicial proceedings against the principal debtor within the period specified in the preceding paragraph, the guarantor is released from his obligation.
Article 753-1
Due to being directors, controllers or other representatives of a juridical person, and agreeing to be the guarantor of the obligation of the juridical person, they are only liable to the obligation of the juridical person occurred within the duration of their offices.
Article 754
If guaranty is given for a series of obligations and for an indefinite period of time, the guarantor may at any time terminate the contract by giving notice to the creditor.
In the case of the preceding paragraph, the guarantor is not liable for the obligations incurred by the principal debtor after the notice has reached the creditor.
Article 755
If guaranty has been given for an obligation which is to be performed at a definite time and the creditor grants to the principal debtor an extension of time, the guarantor is released from his obligation, unless he has agreed to the extension.
Article 756
A person who gives a mandate to another to provide credit to a third party in the name and on the account of such other person is liable to the mandatory as a guarantor for the obligation of the third party arising from the providing of the credit.
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