The extension of the term for the delivery of works not authorized by the guarantor that had secured  the penalty for delay does not  harm it and, therefore, the guarantee is not  extinguished;  any increase in the  penalty agreed does not extinguish the guarantee,  but  cannot be enforceable on the guarantor that will be liable in the terms agreed in the initial  agreement. This decision discussed the effects  on the guarantee of  the novation of the  secured  obligation agreed without the guarantor’s knowledge. Specifically, this referred to a first- demand  bank guarantee granted by a financial institution to cover any liability from construction  defects or from any delay in the  delivery of the work. In the  construction agreement, a  22-month  period was agreed for their completion, and a penalty of €10,000  was  established per day  for any delays attributable to the construction  company.  This agreement was subject to a subsequent amendment according to which  the  term for the delivery of  works was extended and  the penalty agreed increased to €20,000 per day, without the guarantor being informed of these new terms. The works were completed with a delay of over three months, the  reason for which the guarantee was executed.  The financial institution refused to pay the  amounts  claimed and filed  a claim for an ordinary proceeding, arguing that it had not  consented to the  novation of  the  agreement and that,  under article 1851 CC 6 , the guarantee had been extinguished  with  the  novation. The court of  first instance recognized this.  However, the provincial  court of  appeals revoked its judgment, considering that establishing a new expiry date  for the obligation and  changing the penalty for delay did not mean the guarantor was  obliged to anything more than for which it had endorsed the guarantee, but rather that  the change to the delivery date was actually of advantage to it.

Regarding the mentioned precept,  on which the appeal was based, the  Supreme Court indicates that its ratio is to protect the guarantor from any damage it might suffer if the  extension  is granted  to the debtor.  This protection should be made clear  when  the extension lengthens the uncertainty and worsens the  debtor’s financial situation, which  would greatly hinder the way back for the guarantor that has paid in its name.  However,  in the case being judged, this circumstance was not met, because the risk of having to  pay the guarantee did not apply during the period running from the delivery date initially  agreed and that agreed after the amendment.  The granting of a new deadline for the  delivery of the works did not affect any possible subrogating solution in the event of the payment of the guarantee once the length of the delay had been established.

Regarding the increase in the  amount established as a penalty,  the Supreme Court recalled that a change to the terms of the main obligation did not extinguish the  guarantee, even if the guarantor can only be asked to fulfil in the terms initially agreed, unless the change affects the fulfilment period  and  article 1851 CC is applicable. Therefore, the amount agreed as a penalty after the novation of the agreement, as the  guarantor did not know or accept this, is not applicable to it and, as a result, it will only  be liable in the terms of the  initial  secured  obligation, i.e., applying the penalty of €10,000 per day of delay.