Therefore, it may be necessary that the nature of the principal debt or debt securities be determined on the basis of the categories or categories of the debt, so that a valid guarantee can be established and that only a reference to debts of any kind and regardless of the nature of the principal debt cannot be determined. Since the creation of a guarantee is based on the existence of a principal debt, it seems necessary that an essential concept justifying the creation of the guarantee be included in the guarantee agreement, taking into account S 6. In addition, when determining the nature of the principal debt or debt, Parliament defines and limits the contractual obligation of the surety company and determines the extent or extent of the parties` rights and obligations. Previous judgments have been confirmed in numerous subsequent cases with Van Der Merwe AJ, in which the current situation in the recent case of Nedbank Ltd/Wizard Holdings (Pty) Ltd 2010 (5) SA 523 (GSJ) is summarized as follows: “The essential terms of the bonding agreement are the identity of the creditor, the identity of the debtor, the identity of the surety, the identity of the surety, the identity of the surety and the principal amount of the debt. Failure to comply with the essential terms of the bonding agreement means that the contract is not valid due to non-compliance with the legal formalities. A guarantee agreement is an agreement in which the guarantee (a third party) commits to the creditor (in the case of a loan, it would be a financial institution) to fulfill the obligations of the buyer (the principal debtor) if he does not. A surety contract is an agreement in which one is held liable for the obligations of another, the obligations arising from an underlying legal cause. In other words, it is an agreement that constitutes a valid primary obligation, in which one (guarantee) insures the obligations of another (primary debtor) by engaging with the creditor. Therefore, if the principal debtor fails to meet its obligations to the creditor without legitimate cause, the guarantee will meet those obligations. The Constitutional Court shabangu/Land and Agricultural Development Bank of South Africa e.a.2020 (1) SA 305 (CC) stressed the secondary nature of the bonding agreement, which considered that a guarantee could not survive if the underlying undertaking was not valid. It has become convenient for guarantees to attach to creditors both as guarantors and as co-debtors. In such cases, the guarantee has been committed as a coensant, but its liability is still due to the surety contract. The conclusion of the contract as a co-debtor results in the Guarantee State waiving the benefits of the common law arising from debt relief and demerger and is jointly responsible for the obligations of the principal debtor. Even if its undertaking remains incidental, the guarantee is entitled to defence facilities that are related to the principal obligation and defence facilities available to the principal debtor, with the exception of those available to the principal debtor.
On March 10, 2003, Liberty Active Ltd (Liberty), a subsidiary of Liberty Group Ltd, a subsidiary of Liberty Group Ltd, entered into a written broking agreement with ECE Financial Holdings (ECE), under which ECE was to act as an independent intermediary for its financial products. In compensation for its services, the eCE would collect commissions on premiums collected by Liberty for contracts issued on the proposal of the ECE. ECE was permanently registered on February 24, 2011. Between March 2003 and February 2005, eight individuals, including the respondent, signed separate but identical surety agreements in which they agree, as sureties and co-debtors to Solidum with ECE, to pay Liberty any funds that the ECE may owe Liberty in the future “for any cause.”