Q: UPDATED: Guarantor responsibility when borrower SUFFERS unforeseeable illegal actions that result in impossibility

A: Impossibility is an affirmative defense you will need to raise in court if the creditor seeks to enforce the contract. The judge will determine if it is impossible under the law based on the specific facts.

A: When a borrower is unable to repay a loan due to unforeseeable and illegal actions by a third party, the doctrine of "impossibility" could potentially be invoked. However, this generally does not automatically void the loan or the promissory note. The borrower may still be responsible for the debt unless a court determines that the specific circumstances legally excuse them from repayment.

For the guarantor, their liability typically depends on the terms of the guaranty agreement. If the agreement includes language that excuses the guarantor in cases of impossibility or similar situations, the guarantor may have a defense. However, most guaranty agreements are written to ensure that the guarantor remains liable, even if the borrower faces unforeseen difficulties.

It is important to closely examine the loan documents, guaranty agreement, and any court rulings on the landlord's illegal actions. A legal determination may be required to establish whether impossibility of performance applies and how it affects both the borrower’s and guarantor’s obligations. You may want to seek legal guidance to understand your specific rights and responsibilities under California law.