Types of Surety

Simple guarantee

In accordance with Art. 495 para. 1 of the Swiss Code of Obligations, the obligee can require the simple guarantor to pay under the following conditions:

  • If the principal obligor - after the surely has been issued - has become insolvent.

  • If the principal obligor has been granted protection from creditors.

  • If proceedings are initiated against the principal obligor by the obligee, observing all necessary diligence and resulting in the issuance of a definitive certificate of unsatisfied claims.

  • If the principal obligor has transferred his or her domicile abroad and claims can no longer be made against him or her in Switzerland.

  • If it becomes extremely difficult to instigate legal proceedings against the principal obligor because he or she has transferred his or her domicile abroad.If pledges or mortgages exist for the guaranteed claim, the guarantor can demand that the obligee satisfy the debt first from such pledges or mortgages unless the principal obligor has become insolvent or has been granted protection from creditors (Art. 495 para. 2 OR).

Joint and several guarantee

In accordance with Art. 496 para. 1 of the Swiss Code of Obligations, the joint and several guarantor can be ordered to pay on behalf of the principal obligor and before realization of the real estate mortgages under the following conditions:

  • If the principal obligor is in arrears with his or her payment despite reminders.

  • The principal obligor is clearly insolvent.

Building contractor's guarantee

The building contractor's guarantee is widely used in Switzerland and functions as a simple or joint and several guarantee to secure any claims by the client (beneficiary of the surety) on the contractor due to possible defects appearing after delivery and/or installation of the goods, painting or plastering work, etc.

  • Amount of the contractor's guarantee: 5% to 10% of the value of the contract.

  • Term: in general 2 to 5 years following completion of the work and/or delivery of the goods.