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Guarantees: Interpretation, Breach

Personal guarantees or guarantees by another business are commonly required by lenders to provide additional safeguards for a loan. 

In litigation, the same rules that apply to contract interpretation apply to guaranty interpretation. Royal Banks of Mo v. Fridkin, 819 S.W.2d 359, 361 (Mo. 1991). Specifically, the language of the guaranty is to be understood in its plain and ordinary sense and read in light of the surrounding circumstances and the object intended to be accomplished. Nat’l Super Mkt., Inc. v. KMSK, Inc., 940 S.W.3d 47, 49 (Mo. Ct. App. 1997). 

Notably, a guaranty is construed together with any contemporaneously executed agreements dealing with the same subject matter as an aid in gleaning the intent of the parties. Id. For instance, therefore, the Court may look at other documents — e.g., promissory note, lender agreement, deed of trust, etc. — if they are a part of the same transaction. But while they may be interpreted together, they do not constitute a single contract. Id. The liability of the guarantor depends on the guaranty agreement itself. Jamieson-Chippewa Inv. Co., Inc. v. McClintock, 996 S.W.2d 84, 87 (Mo. Ct. App. 1999). 

Contact regarding guaranty agreements, contracts, promissory notes, etc.