How does the guarantee of a contract work?

My father-in-law was evicted from a nursing home. His arearage is about $3700. My wife signed the contract as guarantor. When he was evicted he signed a seperate contract with the head administrator and financial director of the home for repayment of the $3700 in installments. Does this seperate contract release my wife as guarantor on the original contract?

Asked on July 7, 2014 under Business Law, Georgia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

No, signing a separate or subsequent agreement does not necessarily release your wife as guarantor, unless in doing so, the nursing home specifically agreed to release her. Otherwise, if your father-in-law fails to pay as per the schedule, the nursing home can sue your wife, as guarantor for the money; she in turn could sue him for defaulting on his obligation and causing her the loss.


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