Legal Definitions - excussio

Excussio refers to a legal principle, primarily found in civil law systems, which requires a creditor to first pursue and exhaust all available legal remedies against a primary debtor before they can demand payment from a guarantor or surety.

In simpler terms, it means that if someone has promised to pay another person's debt if that person fails to do so (acting as a guarantor), the person owed the money (the creditor) must first try every reasonable way to get the money from the original debtor before they can ask the guarantor to step in and pay.

• Example 1: Small Business Loan

  Imagine a small business owner takes out a loan from a bank to expand their operations. The bank, seeking additional security, requires a personal guarantee from the owner's business partner. If the business encounters financial difficulties and defaults on the loan, the principle of excussio dictates that the bank must first attempt to recover the debt from the business itself. This might involve seizing business assets, pursuing legal action against the company, or trying to collect outstanding invoices owed to the business. Only after these efforts have been diligently pursued and proven insufficient can the bank legally demand payment from the business partner based on their personal guarantee.

  This example illustrates excussio because the bank, as the creditor, is required to exhaust its remedies against the primary debtor (the business) before it can turn to the guarantor (the business partner) for payment.

• Example 2: Apartment Lease Agreement

  Consider a situation where a young professional rents an apartment, and their parent co-signs the lease as a guarantor, promising to cover the rent if their child fails to pay. If the tenant stops paying rent, the landlord cannot immediately demand payment from the parent. Instead, the landlord must first take reasonable steps to collect the overdue rent from the tenant directly. This could include sending formal demand letters, attempting to negotiate a payment plan, or initiating eviction proceedings against the tenant. Only if these efforts to collect from the primary tenant are unsuccessful can the landlord then legally pursue the parent to fulfill their guarantee.

  Here, the landlord must apply excussio by trying to collect from the primary debtor (the tenant) before seeking payment from the guarantor (the parent).