Legal basis: Civil Code of People's Republic of China (PRC).
Article 681 A suretyship contract is a contract in which the surety and the creditor agree that the surety will perform the debt or assume the liability when the debtor fails to perform the due debt or the circumstances agreed by the parties occur.
Article 682 A suretyship contract is an accessory contract to the principal creditor's rights and debts contract. If the principal creditor's rights and debts contract is invalid, the guarantee contract is invalid, unless otherwise stipulated by law.
If the debtor, guarantor and creditor are at fault after the guaranty contract is confirmed to be invalid, they shall bear corresponding civil liabilities according to their faults.
Article 683 A legal person organ shall not act as a guarantor, except for the use of loans from foreign governments or international economic organizations with the approval of the State Council.
A legal person not for profit or an unincorporated organization for public welfare may not act as a guarantor.
Article 684 The contents of a suretyship contract generally include the type and amount of the principal creditor's rights to be secured, the time limit for the debtor to perform the debt, the way, scope and period of suretyship, etc.
Article 685 A suretyship contract may be a separate written contract or a suretyship clause in the principal creditor's rights and debts contract.
If the third party unilaterally makes a written guarantee to the creditor, and the creditor accepts it without raising any objection, the guarantee contract is established.
The forms of suretyship include general suretyship and joint liability suretyship.
If the parties have not agreed on the way of guarantee or the agreement is unclear in the guarantee contract, they shall bear the guarantee liability according to the general guarantee.
Article 687 General Warranty refers to the suretyship that the parties agreed in the suretyship contract that the surety shall bear the suretyship liability when the debtor fails to perform the debt.
The guarantor of a general guarantee has the right to refuse to undertake the guarantee liability to the creditor before the main contract dispute has been tried or arbitrated and the debtor's property has been enforced according to law, except in one of the following circumstances:
(1) The debtor's whereabouts are unknown and there is no property available for execution;
(2) The people's court has accepted the bankruptcy case of the debtor;
(3) The creditor has evidence to prove that the debtor's property is insufficient to perform all debts or cannot perform debts;
(4) The Guarantor waives the rights stipulated in this clause in writing.
Article 688 Where the parties stipulate in the suretyship contract that the surety and the debtor shall be jointly and severally liable for the debts, it is a suretyship of joint liability.
When the debtor of joint and several liability guarantee fails to perform the due debt or the circumstances agreed by the parties occur, the creditor may require the debtor to perform the debt, or may require the guarantor to assume the guarantee liability within the scope of its guarantee.
Article 689 A surety may require the debtor to provide a counter-guarantee.
Article 690 A guarantor and a creditor may enter into a maximum amount guarantee contract through consultation, stipulating that the creditor's rights that occur continuously within a certain period of time shall be guaranteed within the maximum amount of creditor's rights.
In addition to the provisions of this chapter, the maximum amount guarantee shall be governed by the relevant provisions of the maximum amount mortgage in Part II of this Law.