Enforceability of a Guaranty

To recover on a guaranty in Missouri, the party seeking to enforce the guaranty must be able to prove: that a valid underlying primary obligation exists and the unconditional execution and delivery of an express guaranty of payment or performance by the obligor on the primary obligation. First Bank of St. Charles v. Frankel, 86 S.W.3d 161, 169 (Mo. App. ED 2002). As with any other contract, a party seeking to enforce a guaranty must also prove consideration for the guaranty (for example, a recital in the guaranty that the creditor would not have made the primary loan or lease without this unconditional guaranty). Id. This can be found in the document evidencing the primary obligation if that document was executed contemporaneously with the guaranty. Further, a party seeking to enforce a guaranty must show continuing failure of performance by the primary obligor and damages resulting from the breach by the primary obligor (for example, that the primary borrower or lessee is currently in breach of the primary obligation by failure to pay when due all amounts owing and the damages for the failure of the borrower or lessee to pay i.e. the arrearage on the account).