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Where a party acted as a guarantor to a lease and dies, does the guarantee die with the party, or does it continue with a new party stepping into the deceased place as guarantor, and if so, how do you identify the new party?
A guarantee agreement is a form of contract. Under the general principles of contract law, the death of one of the parties to a contract does not discharge the contract. A contract may however, be discharged by frustration where after the formation of the contract an event occurs, which renders further performance of the contract impossible, illegal or something radically different from what was contemplated by the parties when they made the contract. The doctrine of frustration will come into play where there is a radical difference between the original contractual obligation and the performance that is possible as a result of the changed circumstance. Frustration depends on the true construction of the terms that are in the contract read in the light of the nature of the contract and the relevant surrounding circumstances when it was made.
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