A noncommercial guarantee/ suretyship (kafala shakhsiya) which is used to secure commutative contracts (e.g. contracts of sale, contracts of rights, etc), obligations and debts. It involves presenting assurances to creditors of payment by a third party. This guarantee is noncommercial (personal) in the sense that it is charitable in nature where no fees or rewards should be expected or collected wherefrom. For example, a bank may ask a customer to provide one or more guarantees to secure the debts owed by the customer.
Personal guarantees/ suretyships are classified according to the right of recourse to the debtor in two types:
- a recourse guarantee: a personal guarantee in which the guarantor has a right of recourse to the debtor. This guarantee is typically offered at the request of the debtor or with his consent.
- a non-recourse guarantee: a personal guarantee that is offered voluntarily by a third party without the debtor’s request or consent, and thus that party doesn’t have a right to recourse to the debtor. Therefore, it is also known as a voluntary guarantee.
