Ruling 1/2025 of January 8 (“Ruling 1/2025”) of the Portuguese Supreme Court of Justice (“SCJ”) establishes caselaw to the effect that it is admissible to unilaterally terminate (denunciar) a commitment to guarantee (vinculação para aval) by a guarantor (avalista) who ceases to be shareholder or shareholder-director of the company subscribing the promissory note (livrança) before it has been completed.
However, unilateral termination is only allowed if the underlying contract or completion agreement does not provide for a fixed term—either because no term has been agreed upon or because an automatically renewable fixed term has been agreed, with the initial term having already elapsed.
To avoid having to disburse additional funds, the secured creditor may claim that the underlying legal relationship has been reconfigured due to the loss of the guarantee (aval).