§ 6-1. Personal guarantee (kausjon): explanations, credit assessment (kredittvurdering) and duty to refuse credit (avslagsplikt)

A guarantor is the person who guarantees someone else's debt. This section gives a guarantor who is a consumer roughly the same protection that a borrower gets in Chapter 5. The rule largely transfers the rules in §§ 5-1 to 5-5 to the guarantee relationship.

Before the agreement is entered into, the bank must give the guarantor tailored explanations in accordance with the rules in § 5-1. The bank must also assess the guarantor's creditworthiness thoroughly, in the same way as under § 5-2. If the guarantee covers existing debt, the bank must carry out a new credit assessment of the borrower and give the guarantor the result before the agreement is entered into. This also applies to a substantial extension of the guarantee liability.

When the bank obtains information from the guarantor, it must state that the guarantor must provide it, and that knowingly withholding or falsifying information can give the right to terminate the agreement under § 3-51 first paragraph letter a. The result of the credit assessment must be given to the guarantor before the agreement is entered into. The third to fifth paragraphs of § 5-3 apply correspondingly. Among other things, they contain rules on notice of automated refusal and on the bank not having to give reasons for a refusal beyond what is required.

The fourth paragraph is the duty to refuse credit. The bank may only enter into a guarantee agreement if it is likely that the consumer has sufficient creditworthiness. The value of collateral provided, whether current or estimated future value, cannot on its own justify that the creditworthiness is good enough. The fifth paragraph refers to § 5-4 third paragraph and to § 5-5, so that the sanctions for breaches also apply to the guarantor. Among other things, this means that the guarantor's obligations can be reduced when a guarantee has been given in breach of the duty to refuse credit.

This section opens Chapter 6. The following rules deal with the duty to notify of insufficient security (§ 6-2), notification of default and payment deferral (§ 6-3), the guarantor's right to information (§ 6-4), changes to the guaranteed claim (§ 6-5), release of security (§ 6-6), reduction and lapse of the liability (§ 6-7), debt insurance (§ 6-8) and release period (§ 6-9). § 3-36 (information on guarantee liability) refers to this section. The explanations build on the duty to provide guidance under § 3-1 third paragraph, under which the bank must identify the customer's (kunde) needs and provide guidance.

Example: A consumer is going to act as guarantor for someone else's loan. Before the guarantor signs, the bank must explain what the liability involves, assess whether the guarantor can actually pay if needed, and give the result of the assessment.