Good Guy Clause Law and Legal Definition

A good guy clause limits the liability of the personal guarantor for a tenant when a lease is terminated early. If the tenant defaults on the lease but is current on rent payments and surrenders the property in good condition, payment will not be sought from the guarantor. It provides that the landlord will not enforce the personal guaranty as long as the tenant has vacated the premises and has paid all rent up to the date of termination.

The following is an example of a good guy clause:

Notwithstanding anything herein to the contrary, Guarantor's obligations herein shall only be applicable with respect to period prior to such time as Owner obtains vacant, unencumbered possession of the Demised Premises, free and clear of all tenants, subtenants and occupants.