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 ?
Even when a loan guarantee program is nominally targeted at a secured form of lending, such as mortgage loan guarantees, they can only alter allocations because there is a positive probability of the loan becoming at least partially unsecured ex post.
The city's collateral for the Section 108 Loan Guarantee request will consist of a second position on the real estate at 60 Fremont St.
4 billion in loans and loan guarantees to build and repair over 12,000 miles of distribution and transmission lines and make system improvements that will benefit almost 113,000 rural customers.
The reduction of the guarantee fee can be applied during a period of up to two years for loan guarantees contracted no later than 31 December 2010.
Provisions in the Chrysler Loan Guarantee Act of 1979 included the establishment of a Chrysler Loan Guarantee Board, extensive federal oversight of Chrysler's operations, detailed reporting requirements by Chrysler's management, shared sacrifice of parties benefiting from the loan guarantee, and protection of the federal government's interest.
According to the DOE, loan guarantees will enable the Department to share some of the financial risks of projects that employ emerging or significantly improved energy technologies that avoid, reduce, or sequester air pollutants and greenhouse gases.
The European Commission has received two complaints regarding the loan guarantee.
Since inception of the program, no loan guarantees have been approved and there are no current or anticipated budgetary resources available for future loan guarantees.
The court found that Maloof's personal loan guarantee, his pledge of stock and the bank's control of Level Propane did not constitute an economic outlay to create basis.
Gramlich as the Chairman's designee on four federal loan guarantee boards, effective September 1, 2005.
The US Export-Import Bank is to provide a loan guarantee to assist in the sale of seven General Electric aircraft engines to Dubai-based carrier Emirates.
and Senate Slnall Business Committee Chair Olympia Snowe (R-Maine) that reauthorizes and strengthens the Small Business Administration (SBA) and many of its popular loan guarantee programs for two years.