A Deed of Guarantee is a legal document which states that the person giving the guarantee(surety) is responsible for the acts and obligations of the person in respect of whose default the guarantee is given (principal debtor). In the event of default by the principal debtor , surety will be made liable to the creditor.
The deed can be written or oral. Written deeds are preferred as these can be used as proof in the court of law. Deed of guarantee is prepared when the creditor asked for the guarantee to be provided by the principal debtor.
Deed of Guarantee should clearly specify the terms and conditions on which the guarantee is provided, also the amount upto which the surety is made liable to be specified . This document is to be signed by the surety and witnessed .