guarantee

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Guarantee

One to whom a guaranty is made. This word is also used, as a noun, to denote the contract of guaranty or the obligation of a guarantor, and, as a verb, to denote the action of assuming the responsibilities of a guarantor.

guarantee

1) v. to pledge or agree to be responsible for another's debt or contractual performance if that other person does not pay or perform. Usually, the party receiving the guarantee will first try to collect or obtain performance from the debtor before trying to collect from the one making the guarantee (guarantor). 2) the promise to pay another's debt or fulfill contract obligations if that party fails to pay or perform. 3) n. occasionally, the person to whom the guarantee is made. 4) a promise to make a product good if it has some defect. (See: guarantor)

guarantee

verb answer for, assume responsibility, assure, back, be responsible for, become liable, become surety for, certify, commit oneself, ensure, fides, give assurrnce, give one's word, guard, hypothecate, impignorate, insure, make oneself answerable for, obligate, pledge, promise, safeguard, secure, sponsor, stake, support, underwrite, vadimonium, vouch for, warrant
Associated concepts: guarantee a title, guarantee against breakage, guarantee payment
See also: accommodation, adduce, agree, assure, attest, backing, bear, bond, certificate, certify, charge, close, confirm, consent, contract, corroborate, cosign, covenant, coverage, deposit, ensure, hostage, hypothecation, indemnify, indorse, insurance, insurer, lien, oath, pact, pawn, pledge, precaution, promise, protection, reassure, recommend, security, sponsor, stipulate, subscribe, swear, undertake, undertaking, underwrite, verify, vouch, vow, warranty

guarantee

a collateral promise to answer for the debt or obligation of another. A guarantee is a secondary obligation, becoming operative only where the principal debtor is in default; because it is a secondary obligation, should the primary obligation be unlawful or invalid or unenforceable, the guarantor or surety cannot be compelled to make payment under the guarantee. A guarantee should be distinguished from an indemnity, which is a primary obligation to compensate the loss of another; in the latter case the unenforceability of the principal debt will not render the indemnity unenforceable. In Scotland, the same relationship is regulated by the institution of caution (pronounced ‘cayshun’). Proper caution is the term used where the cautioner is expressly bound as guarantor to the creditor. The term improper caution is used when the cautioner is bound as a co-obligant with the principal debtor jointly and severally to the creditor.

The term is used colloquially in the UK for a statement by a manufacturer of goods that it will undertake some responsibility such as repair or replacement.

GUARANTEE, contracts. He lo whom a guaranty is made.
     2. The guarantee is entitled to receive payment, in the first place, from the debtor, and, secondly, from the guarantor. He must be careful not to give time beyond that stipulated in the original agreement, to the debtor, without the consent of the guarantor; the guarantee should, at the instance of the guarantor, bring an action against the principal for the recovery of the debt. 2 Johns. Oh. R. 554; 17 Johns. R. 384; 8 Serg. & Rawle, 116; 10 Serg. & Rawle, 33; 2 Bro. C. C. 579, 582; 2 Ves. jr. 542. But the mere omission of the guarantee to sue the principal debtor will not, in general, discharge the guarantor. 8 Serg. & Rawle, 112; 3 Yeates, R. 157; 6 Binn. R. 292, 300.

References in periodicals archive ?
loan guarantee agreement is designed to support specific economic reforms that the Government of Jordan has been pursuing in order to promote economic stability, growth and prosperity for the Jordanian people.
By reducing loan rates, provided that these loans are secured by the Loan Guarantee Agency, we achieve two goals, namely we cut the costs of usage of borrowed funds for small companies and resolve the issue essential for many small businesses, which is the lack of security for crediting", Ekaterina Orlova, Director of the Small Business Department of the Bank of Moscow, underlined.
The Department of Treasury noted in a statement that the US loan guarantee "will allow Jordan to access affordable financing from international capital markets, ensuring that Jordan can continue to provide critical services to its citizens as it enacts transformative economic reforms and hosts 600,000 refugees who have fled the violence inside Syria.
The Obama administration's proposed loan guarantee for Vogtle transfers the risk onto American taxpayers, who would pay up to $8.
Seen Parnell, Begich said it would be very difficult for the state's congressional delegation to get an increase in the federal loan guarantee.
needs the HUD Section 108 Loan Guarantee to ensure it receives the necessary financing for its expansion and growth plans, which include retaining its 47 current employees, and creating a minimum of 35 full-time jobs.
Citigroup Inc (NYSE: C) and others have announced that they would be offering a loan guarantee to a solar firm.
3 billion package of loan guarantees to UK car makers and large suppliers was announced in January, but "little progress has been made in releasing funds through this scheme," said a report today from the House of Commons Business Innovation and Skills Committee.
7 million loan guarantee to construct and operate a 17 megawatt wood-fueled biomass facility.
6 billion under its two primary small business loan guarantee programs during fiscal 2007, setting records in number of loans and dollars.
The loan guarantee program was authorized in Title XVII of the Energy Policy Act of 2005 (EPAct) that President Bush signed into law on August 8, 2005.
The act created the Local Television Loan Guarantee Program and established the LOCAL Television Loan Guarantee Board to finance projects to provide access to signals of local television stations to households in areas with limited or no access to such signals from a commercial, for-profit satellite service or other multichannel video provider.