A Comparative Survey on the Boundaries of the Liability of the Guarantor in Commercial Instruments Considering Iranian and French Laws and Certain Conventions

As stated in the last phrase of the Article 249 of the Commercial Code of Iran, the guarantor has only joint liability with the person to whom the guarantee is given. This has limited the scope of guarantor's liability and enables him/her to rely on objections on which the principal debtor can also rely. Nevertheless, the question that is raised in the scope of guarantor's liability and its limitation to the liability of the creditor is: in case of the principal debtor's incapacity or his signature being forged, can the guarantor, too, as for the last part of aforementioned Article consider himself/herself exempt from liability? The Iranian law legislators did not provide a clear answer to the above question, but the French Law and the Geneva Convention and UNCITRAL, meanwhile accepting independence for guarantor's liability, maintain that the guarantor alongside the other signatories has a joint liability. In the Iranian Law, despite the silence of the legislators, one may consider this solution: in the engagement per se, there is no subjacency. Thus in case of signature forgery of the principal debtor or his incapacity, guarantor's engagement, although independently, finds actuality and as an exception to the decree of the last part of Article 249 of the Commercial Code, although the principal debtor in these suppositions has no liability for the holder of commercial instrument, the guarantor is obligated to pay the money.