Guarantee liability must be distinguished; if it expires, it's hard to pursue

Compiled and organized from: Heze Intermediate People's Court
 
Case review
On January 31, 2019, the defendant Guo XX borrowed 50,000 yuan from the plaintiff Zhao XX, claiming an urgent need for money, and issued an IOU. Wu XX signed the IOU as a guarantor. After multiple reminders from the plaintiff, the two defendants did not repay the loan. Therefore, the plaintiff filed a lawsuit in court, requesting Guo XX to repay the 50,000 yuan loan and Wu XX to bear joint and several guarantee liability.

 
 

The IOU does not stipulate the method of guarantee for Wu Moumou. According to the law, Wu Moumou should bear joint and several guarantee liability.
 
The due date for the performance of the principal debt stipulated in the IOU was March 30, 2019. The plaintiff, Zhao, did not provide valid evidence to prove that he asserted his rights to the guarantor, Wu, within six months after March 31, 2019. The guarantee period in this case has already expired, and the court does not support the plaintiff Zhao's claim that the defendant Wu should bear the guarantee responsibility.
 
The court ruled that the defendant Guo [name hidden] shall return the loan of 50,000 yuan within 10 days after this judgment takes effect, and dismissed the plaintiff's other claims.
 
Guarantee Law of the People's Republic of China
Article 19
If the parties have not agreed on the method of guarantee or the agreement is unclear, the guarantee responsibility shall be borne according to joint and several liability.
 
[2] Article 26
If the guarantor of joint liability does not agree with the creditor on the guarantee period, the creditor has the right to require the guarantor to bear the guarantee liability within six months from the expiration of the debt performance period. During the guarantee period agreed in the contract and the guarantee period stipulated in the preceding paragraph, if the creditor does not request the guarantor to bear the guarantee liability, the guarantor is exempt from the guarantee liability.
 
 
[1] The author's perspective
The law grants the lender the right to hold the guarantor accountable for the guarantee, but it also requires the right-holder to exercise their rights promptly. Therefore, even after the guarantor has signed the loan note, this is not a one-time solution; rights must be exercised correctly and in a timely manner to ensure additional protection. When signing a loan note, it is necessary not only to understand the difference between joint and several liability and general guarantee liability, but also to pay attention to the guarantee period. This requires all parties involved to have a certain grasp of relevant guarantee laws; otherwise, disputes and conflicts can easily arise.