Legal Definitions - fidejussion

Fidejussion is a legal concept, rooted in Roman law, where a person voluntarily agrees to provide additional security for an obligation owed by another individual or entity. This arrangement means that the original person (the principal debtor) remains fully responsible for their debt or duty, but a third party (the fidejussor) offers an extra layer of assurance to the creditor. The primary effect is to strengthen the creditor's position by giving them another party to seek performance or payment from, without reducing the principal debtor's initial liability.

Here are some examples illustrating fidejussion:

• Small Business Loan: Imagine a new entrepreneur, Maria, seeking a loan from a bank to launch her artisanal bakery. Due to her limited business history, the bank is hesitant. Maria's experienced business partner, David, agrees to act as a fidejussor. He signs a separate agreement with the bank, promising to repay the loan if Maria defaults on her payments.

  Explanation: David's commitment provides additional security to the bank. Maria remains the primary borrower and is fully responsible for repaying the loan. However, if Maria fails to meet her obligations, the bank can then pursue David for the outstanding amount. David's agreement does not remove Maria's liability; it simply adds another layer of assurance for the bank.

• Residential Lease Agreement: A recent college graduate, Ben, wants to rent his first apartment, but his entry-level salary doesn't quite meet the landlord's strict income requirements. Ben's aunt, Sarah, agrees to act as a fidejussor for the lease. She signs a guarantee agreement with the landlord, promising to cover the rent and any potential damages if Ben fails to do so.

  Explanation: Ben is the primary tenant and is solely responsible for paying rent and adhering to the lease terms. His aunt's agreement provides additional security to the landlord. If Ben stops paying rent or causes damage to the property, the landlord can seek payment from Sarah, but Ben's primary obligation as the tenant remains unchanged.

• Event Planning Contract: A client hires an event planning company to organize a large corporate gala. Given the significant investment and the importance of the event, the client wants extra assurance that all services will be delivered as promised, even if the primary company encounters unexpected issues.

  Explanation: A third-party insurance provider agrees to act as a fidejussor for the event planning company. They issue a performance bond, promising to ensure the event's successful execution or compensate the client if the event planning company fails to fulfill its contractual obligations. The event planning company is primarily responsible for delivering the gala as per the contract. The insurance provider's bond serves as additional security. If the event planning company defaults, the client can turn to the insurance provider to ensure the event proceeds or to recover damages, without relieving the event company of its primary duty.