The Vanishing Surety
In January 2022, Sophie lends 30,000 EUR to her friend Marc for a business venture. Marc's brother, Luc, signs a document titled 'Borgtocht' (surety) on 15 January 2022, stating: 'I, Luc, guarantee the repayment of Marc's loan of 30,000 EUR plus interest at 5% per annum, up to a maximum of 35,000 EUR.' The document is signed only by Luc; Sophie and Marc do not sign. Marc pays interest until June 2023, then defaults. Sophie demands payment from Luc in August 2023. Luc refuses, arguing (1) the surety is invalid because it is not in the form of a notarial deed, and (2) even if valid, he is discharged because Sophie did not sue Marc within six months of the default. Sophie sues Luc in the Court of First Instance of Brussels. Belgian law applies.
1. Is Luc's first argument correct? Discuss the formal validity of the surety under Belgian law.
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Luc's argument fails. Under Article 2015 of the old Civil Code (now Article 5.190 of the new Civil Code, in force since 1 January 2023 but not retroactive), a surety must be evidenced in writing; however, a notarial deed is not required. The document signed by Luc is a private writing that clearly identifies the secured obligation (Marc's loan of 30,000 EUR plus 5% interest), the maximum amount (35,000 EUR), and Luc's intention to be bound. Sophie's acceptance is not required in writing because the surety is a unilateral contract; Luc's signature suffices. The absence of Sophie's and Marc's signatures does not invalidate the surety. Therefore, the surety is formally valid. Luc cannot rely on the lack of a notarial deed.
2. Is Luc's second argument correct? Analyze whether Sophie's failure to sue Marc within six months discharges Luc.
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Luc's second argument is also incorrect. Under Belgian law, the surety benefits from a right of discussion (beneficium ordinis) unless waived, but the creditor is not obliged to sue the principal debtor within a specific time. The surety is discharged only if the creditor's negligence causes the surety to lose subrogation rights (Article 2037 old Civil Code, now Article 5.203 new Civil Code). Here, Sophie demanded payment from Luc in August 2023, only two months after default. There is no evidence that Marc became insolvent during that period or that Sophie's delay caused Luc to lose recourse against Marc. Moreover, the surety contract did not set a deadline for Sophie to act. Thus, Luc remains liable for the principal plus interest, capped at 35,000 EUR. The six-month period Luc invents has no legal basis.