§ 6-6. Release of security: when is the guarantor released from liability?
Machine-translated from Norwegian. The Norwegian text is the one that applies. Read the original in Norwegian.Norsk English العربية Polski Українська
In brief
- The lender (kredittyter) cannot release security without the express consent of the guarantor (kausjonist), with two narrow exceptions.
- The consent must concern a specific security and an imminent release, and if given by a consumer (forbruker), it must be in writing and signed.
- If the rule is breached, the guarantor is released. The same applies if security is not provided as assumed.
The text of the law (unofficial translation)
§ 6-6. Release of security etc.
What does this mean?
The lender therefore cannot release such security without the guarantor's express yes. This applies to security that was provided, or that was assumed to be provided, when the guarantee was agreed. There are two exceptions: the lender provides other security that is at least as good for the guarantor, or the release means little or nothing for the guarantor's position.
The consent has its own requirements. It can only be given in connection with a release that is imminent, and it must concern a specifically identified security. A general consent given in advance is therefore not enough. If the guarantor is a consumer, the consent must be in writing and signed. In addition, § 3-9 third paragraph applies correspondingly. Under that section, an agreement is binding on the customer (kunde) only if the formal requirements in the first and second paragraphs of that section have been followed. The agreement may nevertheless apply if the customer does not wish to rely on the defect, or if the service provider (tjenesteyter) proves (shows with evidence) that the customer did in fact give consent.
The consequence of breaking the rules is strict. If security is released without being covered by the exceptions or a valid consent, the guarantor is released. The same applies if security is never provided as assumed when the agreement was entered into.
The section has several neighbouring provisions that supplement it. Under § 6-2, the lender must notify the guarantor in writing without undue delay if assumed security is not provided or later ceases to exist. Under § 6-4, the guarantor may at any time request information, including about the value of the security that has been provided.
Example: The lender wants to release a security and asks the guarantor, who is a consumer, for consent. The guarantor must then sign a written consent that concerns that exact security and a release that is about to take place.