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 ?
The Bank of Moscow started to cooperate with the Loan Guarantee Agency, having signed a cooperation agreement aimed to improve bank crediting conditions for small and medium-sized enterprises (SMEs) in the framework of the state programme of SMEs support.
The United States today re-affirmed its strong commitment to the people of Jordan by signing a sovereign loan guarantee agreement with the Hashemite Kingdom of Jordan," the State department said.
The MoCI programme, which was launched on 31 October last year, will initially give out loan guarantees to 50 small and medium companies during the trial period," said a report in the Muscat Daily newspaper.
Of particular concern in the SACE Freedom of Information Act (FOIA) proceeding is the fact that the amount of taxpayer-backed obligations for the proposed Vogtle reactors is more than a dozen times greater than the failed Solyndra loan guarantee.
Mark Begich (D-AK) has urged the state to consider a loan guarantee that would help with financing for a major Alaska natural gas pipeline.
Global Banking News-September 28, 2011--Citi to offer loan guarantee for solar firm(C)2011 ENPublishing - http://www.
NOT a single loan or loan guarantee has been made under the Government's automotive assistance programme, a report from MPs said today.
Several of the loan guarantees support renewable energy ventures.
Department of Energy as part of the DOE's pre-application process for loan guarantees under the Energy Policy Act of 2005.
The Tax Court noted that two shareholders (directors) provided loan guarantees to the company, but without mention or expectation of compensation.
The program authorizes the board to approve loan guarantees up to 80 percent of loans, totaling no more than $1.
taxpayers are tapped to subsidize loans and loan guarantees used to finance the export of auto manufacturing overseas.