Legal Definitions - accessory obligation

An accessory obligation is a legal duty or responsibility that is secondary to, and entirely dependent upon, a primary or main obligation. It cannot exist independently; its purpose is typically to secure, guarantee, or facilitate the fulfillment of the principal obligation. If the primary obligation is fulfilled, extinguished, or becomes invalid, the accessory obligation usually ceases to exist as well.

Here are some examples to illustrate this concept:

• Loan Guarantee: Imagine a small startup company applies for a business loan from a bank. The bank, wanting extra assurance, requires the company's founder to personally guarantee the loan. The company's duty to repay the loan is the primary obligation. The founder's personal guarantee, which means they are legally bound to repay the loan if the company defaults, is the accessory obligation. This guarantee only exists because the main loan exists. If the company successfully repays the entire loan, the founder's personal guarantee is automatically released.

• Mortgage on a Property: When someone buys a house and takes out a loan from a bank, they enter into a mortgage agreement. The homeowner's duty to repay the loan amount to the bank is the primary obligation. The mortgage itself, which gives the bank a legal right to take possession of the property if the homeowner fails to make payments, is the accessory obligation. The mortgage exists solely to secure the repayment of the loan. Once the loan is fully paid off, the mortgage is discharged, as the accessory obligation no longer has a primary obligation to secure.

• Security Deposit in a Rental Agreement: A tenant signs a lease agreement for an apartment and pays a security deposit to the landlord. The tenant's duties, such as paying rent on time and maintaining the property, along with the landlord's duty to provide a habitable living space, constitute the primary obligations of the lease. The landlord's duty to return the security deposit at the end of the lease term, provided the tenant has fulfilled their primary obligations and caused no damage, is an accessory obligation. This obligation to return the deposit is secondary to the main lease agreement and serves to secure the tenant's performance of their primary duties. It only becomes due for return (or partial return) once the primary lease term concludes and conditions are met.