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ARTICLE · 24 APRIL 2017

TD v Konga: When Guarantors Are Guaranteed To Pay

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Guarantors beware: the Court of Appeal, in The Toronto-Dominion Bank v Konga,1 held that the guarantor was required to pay in response to a demand for payment pursuant to a guarantee, even where the debtor corporation had not failed to make a payment under the loan agreement.

CanadaFinance and Banking
Evita Ferreira
Evita Ferreira
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Guarantors beware: the Court of Appeal, in The Toronto-Dominion Bank v Konga,1 held that the guarantor was required to pay in response to a demand for payment pursuant to a guarantee, even where the debtor corporation had not failed to make a payment under the loan agreement.

Background

The appellant, Raymond Konga ("Konga" or the "Guarantor"), guaranteed a loan made by the respondent, The Toronto-Dominion Bank ("TD"), to Vermatin Inc. (the "Corporation"). TD claimed that the Corporation breached the terms of the loan agreement and demanded repayment of the loan from both the Corporation and Konga. TD moved successfully for summary judgment against Konga for payment pursuant to the guarantee.

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