21 May 2026
Suretyship is an age-old instrument used to secure payment or performance of an obligation. The concept already existed in Roman law as a specific form of joint liability, where several debtors were bound to satisfy the same debt.
Through the French Code Civil, suretyship was introduced into the former Dutch Civil Code. It was subsequently incorporated into the current Dutch Civil Code, in Article 7:850. The provision reads: “Suretyship is the agreement whereby one party, the surety, undertakes towards another party, the creditor, to perform an obligation that a third party, the principal debtor, has or will have towards the creditor.”
This article explains the two types of suretyship recognised in civil law. It also outlines what to consider when entering into a suretyship and what your rights and obligations are once you have acted as a surety.
In civil practice, two types of suretyship are distinguished: private suretyship and business suretyship.
For both forms, the principle applies that if the debtor is unable to fulfil their obligations towards the creditor for any reason, the creditor may recover the claim from the entire assets of the surety. It is therefore common for banks to require a director–major shareholder (DGA) to provide a surety when financing their company.
A private suretyship is entered into by a so-called natural person. This is a person of flesh and blood who holds rights and obligations. In this case, the person does not act in the exercise of a profession or business. The natural person, or private individual, therefore commits their entire private assets to the creditor. This is a far-reaching obligation.
As a result, a private surety runs a financial risk if the principal debtor defaults. That potential personal financial risk can also cause tension in the surety’s personal relationships.
A business suretyship is entered into within the normal course of business activities. In other words, it forms part of the “ordinary activities of an enterprise”. This means that a suretyship entered into by a natural person can still qualify as a business suretyship.
To answer this question, it must be assessed whether the financing for which the suretyship was given benefits the business. It is not sufficient that the creditor merely wanted to cover an unusual risk.
Example: a small SME that once obtained financing but subsequently repaid it and does not regularly take out new loans to finance investments is less likely to fall within the scope of business suretyship. By contrast, a business that frequently obtains new financing—for example to start new projects—will more likely be considered to have entered into a business suretyship.
A surety naturally has not only obligations but also rights. For example, the surety cannot independently raise defences against the claim for which the suretyship was given, but they may raise all defences that the debtor could have raised.
A suretyship can exist without the debtor being aware of it, for example when the creditor and the surety conclude a separate agreement. However, a suretyship can never exist without an underlying financing arrangement or debt—there must always be an obligation between the creditor and the debtor.
If the debtor’s obligation towards the creditor no longer exists, the creditor cannot enforce the suretyship against the surety.
If the agreement between the creditor and the debtor has ceased to exist due to limitation (statute of limitations), the suretyship also comes to an end.
Another right of the surety is that the creditor can only prove a suretyship against the surety by means of a signed written document.
If the surety is called upon, they acquire a statutory right of recourse against the debtor for everything they have paid to the creditor.
A surety can only be held liable once the debtor is in default. This means that the debtor has failed to fulfil their payment obligations towards the creditor despite having been formally demanded to do so. When the creditor puts the debtor in default, the creditor must also notify the surety at the same time.
Because a private surety commits their entire private assets, the law provides additional protections in relation to the creditor:
At first glance, a suretyship agreement may appear straightforward and self-evident. In reality, however, it is not.
Anyone acting as a surety should carefully consider—and properly record—the legal basis and purpose of the suretyship. Likewise, if a surety is approached by a creditor for payment, the surety should be aware of their rights in order to avoid unnecessarily complying with demands made by the creditor.
Have you been asked to provide a suretyship? Or are you confronted by a creditor as a surety? Please feel free to contact us without obligation. We will be happy to assist you.
