Commentary on Article 331. Grounds and Form of Guarantee and Suretyship of the Civil Code of the Republic of Kazakhstan

1. The legal basis for the establishment of suretyship and guarantee is a bilateral agreement. The parties to a suretyship agreement or a guarantee agreement are the creditor under the obligation being secured and the surety or guarantor, who is a third party in relation to the principal obligation. At the same time, several persons may participate simultaneously on either side of the agreement (see Article 269 of the Civil Code of the Republic of Kazakhstan and the commentary thereto concerning plurality of parties to an obligation).

The relations between the surety or guarantor and the debtor under the principal obligation on which the suretyship or guarantee is based fall outside the terms of the suretyship or guarantee agreement (see the commentary to Articles 329 and 332–335 of the Civil Code).

A suretyship agreement and a guarantee agreement are unilateral-obligation agreements (which should not be confused with unilateral transactions), since obligations arise only for one party—the surety or guarantor—while the creditor acquires rights only and bears no obligations.

Suretyship and guarantee agreements are consensual. Rights and obligations arise from the moment the parties reach an agreement and formalize it in the form required by law. Under the general rules governing the performance of obligations and contracts (Articles 273 and 401 of the Civil Code), suretyship and guarantee agreements may not be terminated or amended unilaterally, except in cases provided for by law or by the agreement itself.

A surety or guarantor is not entitled to revoke the suretyship or guarantee if the relevant agreement does not provide for the possibility of unilateral amendment or termination.

The gratuitous nature of suretyship and guarantee follows from the legal character of these agreements as unilateral-obligation contracts and agreements between the creditor and the surety or guarantor. However, in accordance with the civil-law principle of freedom of contract, a suretyship or guarantee agreement may provide for consideration.

The gratuitous nature of suretyship or guarantee does not affect the relationship between the surety or guarantor and the debtor under the principal obligation (see Articles 334 and 344 of the Civil Code and the commentary thereto). Such relationships remain outside the scope of the guarantee or suretyship agreement.

2. State guarantees constitute an example of the application of guarantees established by law. The procedure for their application, the conditions for their issuance, the requirements regarding their form and content, and the procedure for their enforcement are set out in the law governing external borrowing.

3. Suretyship and guarantee agreements must be concluded in writing. Failure to comply with the simple written form renders these agreements invalid.

4. Pursuant to paragraph 3 of the article under consideration, compliance with the required written form is also deemed to include the sending by the surety or guarantor of a written offer to the debtor’s creditor (see Article 395 of the Civil Code and the commentary thereto), followed by acceptance by the creditor within a normally reasonable period. Such acceptance may be expressed through silence (see Article 396 of the Civil Code and the commentary thereto).

The sufficiency of silence as acceptance follows from the provisions of the article under consideration, which require the creditor to express a refusal to accept the offer within a normally reasonable period. Otherwise, the suretyship or guarantee agreement enters into force.

The possibility of recognizing silence as acceptance on the basis of a legislative act is provided for by the dispositive rule contained in paragraph 2 of Article 396 of the Civil Code. All provisions governing the procedure for concluding contracts, as set out in Chapter 23 of the Civil Code, apply to the offer made by the surety or guarantor and to the creditor’s acceptance.

In connection with the article under consideration, it should be noted that, given the substance of its provisions, the oral acceptance of the creditor should also be treated as equivalent to the conclusion of a suretyship or guarantee agreement in writing. In such a case, the suretyship or guarantee agreement enters into force from the moment of acceptance.

Only the creditor’s refusal of the proposal made by the surety or guarantor within the period normally required for such refusal releases the surety or guarantor from the obligations assumed.

5. A normally reasonable period should be understood as the time between the making of an offer and its receipt by the addressee, as well as the time between acceptance of the offer and receipt of information about that acceptance by the person who made the offer. This period also includes the minimum time reasonably necessary to consider the proposal.

For example, if postal delivery between Almaty and Kokshetau takes approximately five days, the normally reasonable period for the creditor’s refusal of a proposal sent by post by a surety or guarantor would be approximately 11 to 14 days, depending on whether weekends fall on the date the proposal or notice of refusal is received.

Naturally, the period normally required for a refusal may vary in each particular case. Each party is entitled to present relevant arguments and evidence in this regard.

This commentary was prepared as part of the scientific and practical research program of the Private Law Research Centre of the Kazakh State Law University.

Head of the Working Group responsible for drafting the Civil Code of the Republic of Kazakhstan, Corresponding Member of the Academy of Sciences of the Republic of Kazakhstan, Professor — M.K. Suleimenov.

Deputy Head of the Working Group, Professor — Y.G. Basin.

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