Study Of Guarantor’s Liability After Invalidation Of Guarantee Contract

After the guarantee contract is invalid,the guarantor does not need to continue to bear the guarantee responsibility,but it should bear certain civil liability if it is at fault for the consequences of the invalid guarantee.The invalidity of the contract will generally produce legal consequences such as return of property,damages and discount compensation,etc.Article 38(2)of our Civil Code and Article 17 of the Interpretation of Guarantee of the <Civil Code> clearly require that after the invalidity of the guarantee contract,each party shall bear the liability for damages equivalent to the fault.The guarantor’s fault in causing the invalidity of the security contract is a prerequisite for the guarantor’s liability for damages.The determination of the guarantor’s fault should be distinguished from the situation: in the case where the guarantee contract is invalid for its own reasons,the guarantor’s fault refers to the invalidity of the guarantee contract due to the guarantor’s conduct;in the case where the guarantee contract is affected by the validity of the main contract,the guarantor’s fault is reflected in the fact that the guarantor knows that the main contract is invalid but still provides the guarantee or the conclusion of the guarantee contract contributes to the conclusion of the main contract,causing the creditor to suffer Loss of reliance interest.Article 17 of the Interpretation of Guarantees of the Civil Code sets the upper limit of the guarantor’s liability by way of equal sharing,leaving the determination of the specific share of liability within the upper limit according to the degree of fault to the discretion of the judge.In order to avoid the mechanical application of the upper limit of liability and damage to the legal rights and interests of the parties,we should establish the rules for determining the liability based on the basic jurisprudence of fault-based comparison,supplemented by the comparison of cause and effect,and distinguish the fault of the creditor,debtor and guarantor,and precisely apply the provisions of Article 17 of the Interpretation of Security of the Civil Code.