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Civil Law

Explanation of Article 584

Explanation of Article 584

The article addresses an effect of the guarantor's obligation being subordinate to the guaranteed obligation; namely, that the guarantor's obligation should not be more burdensome than the guaranteed obligation. The first paragraph clarifies that if the guarantee is for an amount greater than the guaranteed debt, the guarantee is only valid for the amount of the guaranteed debt. For example, if the debt is ten thousand riyals and the guarantee is for twelve thousand riyals, the guarantee is only valid for ten thousand riyals. Similarly, if the guarantor's obligation has stricter conditions than the guaranteed obligation, it is only valid under the conditions of the guaranteed obligation. For instance, if the debtor's obligation is conditional or deferred and the guarantor's obligation is immediate or current, the guarantee is valid if it is conditional or deferred, as appropriate. The invalidity of the guarantee for the excess amount of the debt or for the stricter condition falls under the principle of contract divisibility mentioned in paragraph (2) of Article (74).

The second paragraph explains the permissibility of the reverse in both cases, where the guarantor's obligation is for an amount less than the debtor's obligation; for example, if the debt is ten thousand riyals and the guarantee is for eight thousand riyals, or if the guarantor's obligation has lighter conditions than the debtor's obligation; for example, if the debtor's obligation is immediate and the guarantee is deferred or conditional, the guarantee is valid in all such cases, as previously explained in Article (582), because the guarantor's obligation remains subordinate to the guaranteed obligation.

Related To

Article 584

  1. If the suretyship is for an amount greater than the amount owed by the debtor and is under stricter conditions than those imposed on the debtor, it shall be valid only for the amount of the debt owed by the debtor and under its conditions.

  2. A suretyship may be for an amount lesser than the amount owed by the debtor and under less strict conditions.