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 ?
Indeed, in the context of boosting aggregate consumption, researchers have recently started considering ways to direct unsecured credit to households at "favorable interest rates," with the public sector bearing default risk, exactly as would occur under the loan guarantees to consumers we study.
One grants loan guarantees and the other provides interest rate subsidies to businesses producing green products.
Thus, under today's budgetary rule, legislation providing direct loans or loan guarantees to assist the automobile industry would require the inclusion of the estimated subsidy cost, which would require an appropriation of budget authority.
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.
Since 1985, Communist China has become the largest Asian beneficiary of Eximbank loans and loan guarantees.
As a former loan officer with the New Jersey Economic Development Authority, I am familiar with the criteria used for providing loans and loan guarantees to the business community.
According to Barragan, the cuts would effectively quash an entire year of loan guarantees, severely limiting the center's effectiveness.
Of the fourscore or so outstanding deals, about 85% were loan guarantees of less than $10 million and 60% of less than $1 million.
In May, the Federal Accounting Standards Advisory Board issued two pronouncements dealing with federal agency loans and loan guarantees.
Under the loan guarantee system, small and midsize companies can obtain local public loan guarantees for up to 50 million yen in bank loans for up to seven years, even without collateral.
TOKYO, March 31 Kyodo Japan will extend new financial support to Malaysia in the form of loan guarantees worth 700 million dollars, the Finance Ministry said Wednesday.
Slicing loan guarantees from 90% to a minimum of 75% creates a big problem for small business borrowers who already bicker with bankers to secure capital to finance exports.