Corporate Guaranty contract wording

[businessowner31]

Our starting business is requiring a corporate guaranty because we are purchasing property. The guaranty has had the draft contracts for months but now that it is time to sign, the won't until they understand what the following phrase means. I googled it and it seems pretty common, but they are concerned that this statement means its more of a draw note than a term loan. The following statement is under the "duration of guaranty" section.

It is anticipated that fluctuations may
occur in the aggregate amount of Indebtedness covered by this Guaranty, and
Guarantor specifically acknowledges and agrees that reductions in the amount of
Indebtedness, even to zero dollars ($0.00), prior to Guarantor’s written revocation of
this Guaranty shall not constitute a termination of this Guaranty. This Guaranty is
binding upon Guarantor and Guarantor’s heirs, successors and assigns so long as
any of the guaranteed Indebtedness remains unpaid and even though the
Indebtedness guaranteed may from time to time be zero dollars ($0.00).

Can anyone tell me what this means?

 

[quincy]

Our starting business is requiring a corporate guaranty because we are purchasing property. The guaranty has had the draft contracts for months but now that it is time to sign, the won't until they understand what the following phrase means. I googled it and it seems pretty common, but they are concerned that this statement means its more of a draw note than a term loan. The following statement is under the "duration of guaranty" section.

It is anticipated that fluctuations may
occur in the aggregate amount of Indebtedness covered by this Guaranty, and
Guarantor specifically acknowledges and agrees that reductions in the amount of
Indebtedness, even to zero dollars ($0.00), prior to Guarantor’s written revocation of
this Guaranty shall not constitute a termination of this Guaranty. This Guaranty is
binding upon Guarantor and Guarantor’s heirs, successors and assigns so long as
any of the guaranteed Indebtedness remains unpaid and even though the
Indebtedness guaranteed may from time to time be zero dollars ($0.00).

Can anyone tell me what this means?

What is the name of your state or, if not in the US, what is the name of your country?

 

[businessowner31]

What is the name of your state or, if not in the US, what is the name of your country?

We are in MN.

 

[quincy]

We are in MN.

Thank you for providing your state name, businessowner. I probably should have told you what I am going to tell you now in my first post, because the state name does not matter (although the country name could).

All parties need to sit down with an attorney who can read and interpret the contract and all clauses for everyone, so that the understanding is the same for all. Until everyone agrees to all terms of the contract, and understands the contract and all clauses to mean the same thing, a dispute can have all parties arguing it out in court.

I can see the other party's concern, though.