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Guarantees (see Practice Note: Guarantees) and third party security (see Practice Note: Third party security) from individuals are relatively common forms of credit support in financing transactions.

For example, in transactions involving a corporate borrower, the lender might request guarantees or security from the Directors of the borrower.

Where the borrower is an individual, the lender might request a guarantee or security from another family member related to the borrower, such as a spouse, civil partner or parent of the borrower.

When taking a guarantee or security from an individual there are a range of issues to be considered in addition to those which arise generally in the context of the law of guarantees and security. The key issues are discussed in Practice Notes:

1. •

   Key issues in taking a guarantee from an individual in a commercial financing context, and

2. •

   Key issues in taking security from individuals

One of the key issues which lenders should be particularly aware of relates to Undue influence by a third party.