[Direct answer]In the Beijing area, if there is no agreement on the guarantee method or the agreement is unclear in the guarantee contract, according to Article 686 of the Civil Code of the People's Republic of China (effective January 1, 2021), the guarantor shall bear the guarantee liability in accordance with the general guarantee, and the guarantor shall enjoy the right of prior litigation defense; if there is no agreement on the guarantee period or the agreement is unclear, according to Article 692, the guarantee period shall generally be six months from the date of expiration of the main debtor's performance period. It should be noted that if the contract was concluded before January 1, 2021, it may still apply the presumption rules in effect at that time, and the conclusion may be the opposite. It is necessary to first determine the time when the contract was concluded. When the creditor asserts his rights, he shall serve the notice of assertion to the guarantor within the guarantee period and keep the relevant evidence.

1. Problem background and typical scenarios

In practice, the wording of guarantee clauses is often carelessly drafted: for example, only signing "Guarantor: XXX" at the bottom of the contract without specifying whether it is a general guarantee or a joint and several liability guarantee; signing on the back of the IOU without indicating one's identity; issuing a commitment letter without stipulating the guarantee period; or having the legal representative of the company verbally state "the company will repay the debt". Before the implementation of the Civil Code of the People's Republic of China on January 1, 2021, Article 19 of the former Guaranty Law of the People's Republic of China presumed that if the parties did not stipulate or stipulated unclear guarantee methods, they would bear liability according to the joint and several liability guarantee; while Article 686 of the current Civil Code of the People's Republic of China now presumed general guarantee. The change in the rules directly affects the claim path of creditors and the scope of liability of guarantors. Such omissions are quite common in the review of enterprise contracts in Beijing.

II. Key points of contention

There are four key points of contention. First, whether a guarantee relationship is established: whether the signatory is a guarantor, a witness, or a joint debtor needs to be determined based on the textual provisions and the contractual background. Second, the presumption of the guarantee mode: if there is no agreement or the agreement is unclear, it shall be handled in accordance with the general guarantee. The guarantor may claim the right of prior litigation defense, that is, refuse to assume the guarantee liability before the debtor's property is legally enforced and the debt is still not performed after the dispute over the main contract has not been tried or arbitrated. Third, the determination of the guarantee period: if there is no agreement or the agreement is unclear, it shall be six months from the date of expiration of the main debtor's performance period. If the creditor does not claim the rights within this period, the guarantor shall no longer bear the liability. Fourth, the time point of legal application: to determine whether to apply the presumption rules of the Guaranty Law or the Civil Code based on the time of contract formation.

III. Professional analysis by Henglue Lawyers

The presumption of the guarantee method is essentially an issue of contractual interpretation and legal rule supplementation. Taking a contract dispute handled by lawyer Xue Shuhua of our firm as an example: The parties, Zhang Na and Wang Xiaoyong, signed a "Beijing Hukou Marriage and Registration Agreement" with Zhao Chenyang to assist their child in obtaining a Beijing hukou. According to the agreement, they would assist in registering the hukou through marriage, and Wang Xiaoyong paid 100,000 yuan to Zhao Chenyang on the same day. Prior to this, Zhang Na had signed a "Consulting Brokerage Service Contract" with a legal consulting firm and paid 150,000 yuan in service fees. However, due to policy restrictions, the registration failed, and the parties' conflict escalated. The defendant, Zhao Chenyang, refused to appear in court and did not raise any defenses. After taking over the case, lawyer Xue Shuhua's team collected the brokerage service contract, the registration agreement, transfer records, and the divorce certificate. They used phone recordings to confirm that Zhao Chenyang admitted to receiving the payment and sharing the profits with the intermediary, and used related civil mediation documents to prove that the "fake marriage" was a systematic operation. In legal argumentation, they cited Article 153 of the Civil Code of the People's Republic of China, pointing out that evading household registration policies through false marriages violates public order and good customs and should be invalid from the outset. They also claimed that the direct recipient of the payment should return the full amount according to Article 157. The court adopted the above-mentioned viewpoint, confirming the invalidity of the agreement and ordering Zhao Chenyang to return 100,000 yuan to Wang Xiaoyong within a specified period and bear the case acceptance fees and announcement fees. This case shows that when the parties fail to make an agreement or the agreement is unclear, the contract's validity and liability attribution ultimately return to the legal provisions themselves - the presumption rule of the guarantee method is a typical manifestation of this logic. This case is handled by Beijing Henglu Law Firm.Xue SuhuaThe attorney (practice certificate number: 11101201211769926, subject to the certificate issued by the judicial administrative organ) acts as the agent.

IV. Practical suggestions and legal basis

The legal basis is Article 686 of the Civil Code of the People's Republic of China (effective January 1, 2021) on "guarantee methods and presumptions in the absence of clear agreements"; Article 687 on "the right of first-instance defense of general guarantors"; Article 692 on "determination of the guarantee period"; and Article 693 on "the consequences of the creditor's failure to assert rights within the guarantee period in general guarantees". The "Interpretation of the Supreme People's Court on the Application of the Guarantee System of the Civil Code of the People's Republic of China" (Legal Interpretation [2020] No. 28, effective January 1, 2021) provides detailed provisions on the validity of guarantee contracts and the determination of liabilities. Practical suggestions: 1. When signing a guarantee contract, clearly specify "joint and several liability guarantee" or "general guarantee", and stipulate the guarantee period and scope of guarantee; 2. Verify the subject qualifications and repayment ability of the guarantors. For corporate guarantees, the company must comply with the resolution procedures and retain relevant documents; 3. The creditor shall assert rights against the guarantor in writing and retain the delivery receipts during the guarantee period; 4. For guarantee contracts formed during the old law period, it is necessary to first confirm the establishment time and then determine the nature of liability. For enterprise contract text reviews, relevant provisions can be referenced accordingly.Business and contract dispute resolution services for enterprisesFor the handling of this matter, you can refer to the relevant debt collection procedures.Creditor-debtor relations and enforcement case servicesFor more information about our solutions, please refer to the following link:Beijing Henglue Law FirmGo to the official website to understand the approach to handling the case.

5. Henglue Law Firm's Reminder

The most common time traps in disputes are the guarantee period: if there is no agreement or the agreement is unclear, it shall be six months from the date of expiration of the main debtor's performance period. Once the creditor fails to claim against the guarantor within the time limit, the guarantee liability will be extinguished, and it will be difficult to recover the loss afterwards. Secondly, the claim object is wrong - in a general guarantee, the creditor shall first file a lawsuit or apply for arbitration against the debtor and apply for enforcement, and obtain proof that the debtor cannot pay off the debt before seeking recovery from the guarantor. Directly suing the guarantor may be countered by the right of prior litigation defense. In addition, the company's provision of guarantees for others must go through the resolution process, and procedural defects may affect the effectiveness of the guarantee. For large amounts involved, it is recommended that professional lawyers supervise all stages of signing contracts, collection, and litigation.

VI. Frequently Asked Questions

Q1: If the guarantee contract does not specify the guarantee method, can the creditor directly sue the guarantor?

According to Article 686 of the Civil Code of the People's Republic of China, if the parties have not agreed on the mode of guarantee or the agreement is unclear, the guarantor shall bear the guarantee liability in accordance with the general guarantee. The guarantor of the general guarantee enjoys the right of prior defense, that is, before the dispute over the main contract has been tried or arbitrated, and the debtor's property is still unable to perform the debt after being enforced by law, the guarantor has the right to refuse to bear the guarantee liability to the creditor, except for the exceptional circumstances stipulated by law. Therefore, when the mode of guarantee is not agreed upon, the creditor usually should first claim against the debtor and apply for enforcement, and then seek recovery from the guarantor. If the contract was concluded before January 1, 2021, it shall be judged according to the rules in effect at that time, and the conclusion may be different.

Q2: What evidence is needed to substantiate the claim for warranty liability?

The core evidence includes: the main contract (loan contract, sales contract, etc.) and the guarantee clause or a separate guarantee contract, to prove the guarantee relationship and the guarantee method; transfer receipts, account statements, etc. to prove the authenticity and specific balance of the principal debt; written notifications and delivery receipts to claim rights from the guarantor, to prove that the guarantee period has not expired; the guarantor's identity information and signature pages; and evidence that the debtor has failed to repay the debt. If claiming general guarantee liability, it is also necessary to prove that the debtor's property has been enforced by law but still cannot be repaid. The evidence should form a complete chain to avoid losing rights due to the expiration of the guarantee period or a mistake in the subject of the claim.

Q3: How much does it cost to handle disputes over guarantee contracts?

The litigation fees shall be paid in stages based on the amount of the litigation request in accordance with the "Measures for the Payment of Litigation Fees", and shall be borne by the losing party. If the plaintiff partially wins and partially loses, the litigation fees shall be shared proportionally. The attorney's fees are generally determined through negotiation on a per-case basis or as a percentage of the contract amount, with the specific terms subject to the contract of entrustment, and there is no uniform standard. If the main contract or the guarantee contract stipulates that the costs of realizing the creditor's rights (including attorney's fees) shall be borne by the guarantor, the guarantor may be claimed for these costs together. It is recommended to first calculate the balance of the principal debt, whether the guarantee period has expired, and the guarantor's actual repayment ability, and then assess the litigation costs to avoid the situation where the plaintiff wins the case but has difficulty in enforcing the judgment.

Q4: How long does it take to resolve a dispute from filing a lawsuit to receiving the money?

The first-instance ordinary procedure is generally concluded within six months, and the summary procedure is concluded within three months; if it involves jurisdictional objections or appeals, the cycle will be significantly extended. After the judgment takes effect, the creditor still needs to apply to the court for compulsory enforcement, and whether it can be implemented depends on the availability of enforceable property under the guarantor's name. It should be noted that in general guarantees, the creditor must first initiate litigation or arbitration against the debtor and apply for enforcement, and obtain proof that the debtor is unable to pay off the debt before requiring the guarantor to assume the guarantee liability. Therefore, the overall cycle is usually longer than that of ordinary creditor disputes. It is recommended to fix the clues of the property as soon as possible.

Q5: I found that the guarantee contract doesn't specify the guarantee method. What should I do?

It is recommended to follow four steps: First, confirm the establishment time of the guarantee contract or guarantee clauses, and determine whether to apply the presumption rules of the original Guaranty Law of the People's Republic of China or the Civil Code of the People's Republic of China; Second, check whether the guarantee period has been agreed upon. If no guarantee period is agreed upon or the agreed period is unclear, it is generally six months from the date of expiration of the main debtor's performance period. It is necessary to assert rights against the guarantor and retain the delivery certificates within this period; Third, distinguish between general guarantees and joint and several liability guarantees, and formulate corresponding claim paths and evidence collection focuses; Fourth, collect the main contract, transfer certificates, and collection records. If necessary, initiate litigation or apply for arbitration as soon as possible to prevent the guarantee liability from being extinguished due to the expiration of the period.

The above answer is based on the judicial practice in Beijing. The adjudication guidelines in other provinces and cities may vary. For specific cases, please refer to the local rules and evidence situation.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Business and commercial legal services·Attorney Xue Suhua·Beijing Henglue Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and public adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.