150,000 Yuan Private Loan: Borrower Liable but Guarantor Walks Free After Six-Month Guarantee Period Expires

A lender who extended 150,000 yuan to a jewelry shop owner won repayment from the borrower but lost the guarantee claim after failing to demand payment from the guarantor within the statutory six-month period, illustrating the critical importance of timely enforcement against guarantors.

In November 2009, the borrower, who operated a gold and jewelry retail business with her husband, obtained a 150,000 yuan loan from the lender for business capital turnover. The loan was documented in a handwritten receipt signed by the borrower, with another individual signing as guarantor. The receipt specified a one-month repayment term expiring in December 2009.

When the borrower failed to repay, the lender filed suit seeking repayment from both the borrower and her husband as joint debtors, plus the guarantor’s joint liability. The borrower and her husband were absent from proceedings, but the guarantor appeared and mounted a vigorous defense focusing on the expiration of the guarantee period.

Under the guarantee law, when no specific guarantee period is agreed upon, the guarantor’s obligation automatically expires six months after the loan’s maturity date. The guarantor demonstrated that the one-month term meant the guarantee expired in June 2010. The lender admitted having no written evidence of any demand made against the guarantor during the six-month window, stating only that verbal demands had been made but could not be documented.

The court confirmed the borrowing relationship was valid based on the handwritten receipt, which the guarantor acknowledged as authentic. However, the court ruled the guarantor was discharged from liability because the lender failed to exercise the guarantee right within the statutory period. The borrower and her husband remained jointly liable for the 150,000 yuan principal plus interest at the benchmark lending rate from December 2009 until full repayment, as the debt was incurred during marriage for the joint business.