Liability of guarantor and his rights on repossession
20.—(1) Subject to this Act, a guarantor shall not, by reason of the operation of this Act, be discharged from liability under his guarantee.
(2) The liability of a guarantor shall continue notwithstanding that the owner has, pursuant to the provisions of a regulated agreement, taken possession of the goods comprised in the regulated agreement (and whether or not the goods have been redelivered to the hirer pursuant to this Act).
(3) Nothing in subsection (2) shall operate to preserve the liability of a guarantor where the owner and the hirer have entered into a new agreement in respect of the goods comprised in any regulated agreement.
(4) No guarantor shall be liable to any further or other extent than the hirer, the performance of whose obligations he has guaranteed.
(5) Nothing in this Act shall affect any agreement by the guarantor binding him to the performance of any obligation that is not one of the obligations imposed on the hirer under the regulated agreement in respect of which the guarantee is given.
(6) Where goods have been delivered to the hirer pursuant to a regulated agreement and the owner subsequently takes possession of the goods, any guarantor who has paid any moneys to the owner in accordance with his guarantee shall have the like right in like manner to recover those moneys as he would have had if he had been the hirer of the goods.
(7) For the purpose of calculating the amount received by the owner, all moneys paid and the value of any other consideration provided by or on behalf of the hirer shall be deemed to have been paid or provided by the guarantor.
(8) No moneys shall be recovered by the guarantor in excess of the moneys actually paid by him.
Guarantor not to be bound in certain cases
21.—(1) Where a guarantor of the performance of the obligations of the hirer under a regulated agreement enters into an agreement binding the guarantor —(a)
to pay to the owner an aggregate sum which is larger than the balance originally payable under the agreement; or
(b)
to perform an obligation in respect of goods other than the goods comprised in the regulated agreement,
the agreement so entered shall be void unless the agreement is executed by the guarantor in the presence of a solicitor instructed and employed independently of the owner and the solicitor certifies in writing upon the agreement —
(c)
that he is satisfied that the guarantor understands the true purport and effect of the agreement; and
(d)
that the guarantor has executed the agreement in his presence.
(2) A solicitor shall not give a certificate in respect of an agreement under subsection (1) unless —(a)
he has read over and explained the agreement to the guarantor or has caused the agreement to be read over and explained to the guarantor in his presence;
(b)
he has examined the guarantor touching his knowledge of the agreement;
(c)
he is satisfied that the guarantor understands the true purport and effect of the agreement; and
(d)
the guarantor has freely and voluntarily executed the agreement in his presence.
(3) Failure by a solicitor to comply with subsection (2) in respect of a certificate shall not invalidate the certificate.
Rights of guarantor against owner
22.—(1) A guarantor under this Part may at any time secure his discharge by paying the amount due to the owner from the hirer.
(2) Upon such payment being made, the guarantor is entitled to —(a)
sue the hirer in the name of the owner for any breach of the hirer’s obligations under the regulated agreement subject to providing the owner with a suitable indemnity for costs or sue in his own name if he takes a legal assignment of the debt under the regulated agreement; and
(b)
insist upon the transfer to himself of all securities taken by the owner from the hirer to secure performance of the hirer’s obligations.
(3) A guarantor is entitled in the event of any claim being made against him by the owner on the guarantee to avail himself of any set‑off or counterclaim which the hirer may possess against the owner.
(4) Unless otherwise agreed by the parties, a guarantor who exercises his rights under this section shall pay to the owner any reasonable costs incurred by the owner (including legal expenses) in preparing, drawing, stamping or registering the indemnity, assignment or transfer, as the case may be.
Rights of guarantor against hirer
23.—(1) A guarantor is entitled to be indemnified by the hirer against any claim made by the owner on the guarantee.
(2) A guarantor is entitled to compel the hirer to pay the instalments in respect of the regulated agreement as and when they fall due; and for this purpose he may apply to the court for an order to that effect.
Guarantor not to seize
24. Nothing in this Part shall entitle a guarantor to exercise a licence to seize conferred on the owner by the regulated agreement except where the agreement expressly provides that the licence shall be assignable.
Source: Singapore Statutes Online (Attorney-General's Chambers), © Government of Singapore.
