By limitation, a special guaranty is drawn with reference to only one creditor such as a particular person, firm, or corporation. See Niederer v. Ferreira, 189 Cal.App.3d 1485, 234 Cal.Rptr. 779, 788 (1987); Burkhardt v. Bank of America Nat. Trust Savings Ass'n, 127 Colo. 251, 256 P.2d 234 (1953); Brunswick Corp. v. Creel, 471 So.2d 617 (Fla.App. 1985); A. Stearns, The Law of Suretyship, §§ 4.3, 4.4 (5th ed. 1951); 38 Am.Jur.2d Guaranty § 20 (1968); and 38 C.J.S. Guaranty § 41 (1943). The appellees' guaranty in the instant case specifically refers to only one creditor, Husky.

Contracts of guaranty have been described in two broad categories: (1) "special" guaranties which are addressed to a specific party; and (2) "general" guaranties which are addressed to the general public. Burkhardt v. Bank of America Natl. Trust Savings Assn., 127 Colo. 251, 256 P.2d 234 (1953). The rule of law has been simplistically stated that "a special guaranty is not assignable while a general guaranty may be assigned or transferred."

A special guaranty names a definite person as its obligee, and it may be enforced only by that person. ( Burkhardt v. Bank of America Nat. Trust Sav. Ass'n (1953) 127 Colo. 251, [ 256 P.2d 234, 236, 41 A.L.R.2d 1207]; 38 Am.Jur.2d, supra, § 20, p. 1018.) Unless otherwise specified, such a guaranty is not transferable.

However, as noted above, this is a general rule and exceptions have been recognized such as that an obligee may, following breach of a special guaranty, assign his cause of action against the guarantor. Tobin v. Iowa Home Mutual Casualty Co., 209 So.2d 485 (Fla. 3d DCA 1968); Burkhardt v. Bank of America Nat. Trust Sav. Assoc., 127 Colo. 251, 256 P.2d 234 (1953); In re Klink's Estate, 310 Ill. App. 609, 35 N.E.2d 684 (1941). See generally 38 C.J.S. Guaranty § 42(c).

See Annot., 100 A.L.R. 1236 (1936). [1] While the liability of a guarantor cannot be extended by implication beyond the express terms or plain intent of the agreement, Burkhardt v. Bank of America, 127 Colo. 251 256 P.2d 234 (1953), the guaranty must be "reasonably interpreted according to the intention of the parties as disclosed by surrounding circumstances." Continental National Bank v. Dolan, 39 Colo. App. 16, 564 P.2d 955 (1977).

Ferguson Carpet Co. et al. v. Schottenfeld, 109 N.J.L. 539, 162 A. 534, 536 (N.J. 1932). Accord, Wipfli v. Bever, 37 Wis.2d 324, 155 N.W.2d 71, 73 (1967); Burkhardt v. Bank of America National Trust Savings Assn., 127 Colo. 251, 256 P.2d 234, 236 (1953); Niederer v. Ferreira, 189 Cal.App.3d 1485, 234 Cal.Rptr. 779, 788 (2 Dist. 1987) (only named obligee may enforce special guarantee, which is not transferable). See also Zanditon v. Feinstein, 849 F.2d 692, 699 n. 12 (1st Cir. 1988) (interpreting Massachusetts law); Ross v. Imperial Construction Co., Inc., 572 F.2d 518, 520 (5th Cir. 1978) (interpreting Alabama law); 41 ALR 2d 1213, 1216. Nor can the liability flowing from a guarantee be extended by implication beyond the guarantee's precise terms and scope.

It has been said a guarantor, is, like a surety, a favorite of the law.'" Id. at 79 (quoting Burkhardt v. Bank of America, 127 Colo. 251, 256 P.2d 234 (1954). See also Peters, Suretyship under Article 3 of the Uniform Commercial Code, 77 Yale L.J. 833, 861-62 (1968) ("The surety's undertaking, his basic commitment to creditor and principal, represents the high water mark of the surety's potential liability.

It has been said that a guarantor is like a surety, a favorite of the law." Gandy v. Park National Bank, 200 Colo. 298, 299, 615 P.2d 20, 21 (1980) (quoting Burkhardt v. Bank, 127 Colo. 251, 256 P.2d 234 (1953)). Although, by executing the guarantee with the consent-for-modifications clause, Green Shoe exposed itself to the possibility of significant modifications in the original lease agreement, that exposure was not infinite. The 1971 agreement made such fundamental alterations of the terms that are basic to a lease agreement that it constituted a new lease.

Although such a mutual agency may arise under some circumstances, we need not rule on that issue here because the second and third conclusions of the district court concerning the guarantee here are clearly correct. General and special guarantees were defined in Burkhardt v. Bank of America Nat. Trust Sav. Assoc., 127 Colo. 251, 255-56, 256 P.2d 234, 236 (1953) as follows: There are various kinds of guaranties; however, they generally fall into one of two classifications, that is, "general" or "special."

Along with the provision ending the guarantor's liability if the plaintiff's general partner ceased to own 50.1% of the partnership, it ensures that the guarantor's risk, as affected by a change in lessors, will not be altered without his assent. See generally Burkhardt v. Bank of America National Trust Savings Association (1953), 127 Colo. 251, 256 P.2d 234; Annot. 41 A.L.R.2d 1213 (1955); compare Essex International, Inc. v. Clamage (7th Cir. 1971), 440 F.2d 547 (applying Illinois law), with Second National Bank of Peoria v. Diefendorf (1878), 90 Ill. 396. Our analysis of the purpose of the clause can lead to only one conclusion as to the effect of defendant's breach of contract, for if the purpose of the clause were to shift the risk of the hotel's possible unprofitability to the defendant guarantor, thereby preventing the foreclosure of the hotel, it is difficult to conceive how the failure of defendant to perform would not cause the hotel's foreclosure.