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Third party guarantees

Reference received: 2 March 1999


Report 107: Guaranteeing someone else's debt [PDF, 1Mb], November 2006

Tabled in parliament: 9 May 2007

Issues paper

​​Issues Paper 17:​ Guaranteeing Someone Else's Debts, April 2000 

A summary of Issues Paper 17 was also published

NSW Law Reform Commission Media Release - Sexually Transmitted Debt under Scrutiny (25 May 2000)

NSW Law Reform Commission Media ReleaseSeeking guarantors for legal survey (7 August 2001)

Research report

​Research Report 11​: Darling, please sign this form: a report on the practice of third party guarantees in New South Wales , October 2003

NSW Law Reform Commission Media Release -​ University of Sydney Law School Media Release - Darling, please sign this form (5 December 2003)

Terms of reference

To inquire into and report on the legal framework for the protection of guarantors of small business and other loans and in particular, to consider:

(i) whether the present legal framework adequately protects the interests of personal guarantors of small business and other loans;

(ii) whether there is a reasonable level of satisfaction in the community with the operation and application of the existing laws protecting guarantors of small business and other loans, in particular, whether those guarantors, financiers and principal borrowers are satisfied with the present legal framework;

(iii) whether there are more practical and effective strategies for the provision of personal guarantees of small business and other loans that would enhance the development of conscientious lending practices while not placing undue constraints on small business lending; and

(iv) any related matters.

In carrying out its review, the Commission is to have regard to:

  • The report of the Expert Group on Family Financial Vulnerability "Good Relations: High Risks - Financial Transactions Within Families and Between Friends" released by the Commonwealth Attorney General in February 1996, and any other relevant reviews;
  • The effectiveness of current New South Wales legislation with particular reference to the Contracts Review Act 1980 and the Fair Trading Act 1987; and
  • The need to ensure that any legal framework governing this issue adequately and effectively protects the interests of personal guarantors; promotes commercial stability and certainty; and does not unduly restrain small business lending. ​