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

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 ?
(AGL and, together with its subsidiaries, Assured Guaranty) is the leading provider of financial guarantees for principal and interest payments due on municipal, public infrastructure and structured financings.
The government is considering issuing the financial guarantees for the project of the coal-fired electricity plant in the area of Hamrawein with a capacity of 6,000MW.
Lt-Colonel Matar Kharbash, Head of the Team Supporting Smart e-transition at the Naturalisation, Residency and Ports sector, indicated that banks operating in the country have different time frames for refunding the financial guarantees to their customers, in accordance with the work mechanisms adopted by the banks that issued the e-payment cards to customers.
"The financial guarantees are returned in the following cases: If the visitor leaves the country within the statutory period; or if his request was rejected according to the procedures and the policies applicable by the Ministry of Interior," he said.
The financial guarantee business entered into a critical period of transformation in the first half of 2015.
Earlier, she returned Rs 45 millions to contractor of IJP Principle Road illegally in head of financial guarantee money.
The EU will operate under the "Creative Europe" programme a Financial Guarantee Facility from 2016 onwards, allocating more than e1/4120 million to share the risk on loans offered to small and mid-sized enterprises in the cultural sector by banks.
16 December 2011 - MARC today maintained the AAA insurer financial strength (IFS) rating with a "stable" outlook on Malaysian financial guarantee insurer Danajamin Nasional Berhad.
Pakistan and Afghanistan are set to operationalise Afghan-Pakistan Transit Trade Agreement (APTTA) from June 12 as both sides have amicably resolved the issue of financial guarantee and its approval would be sought from Afghan Pakistan Transit Trade Co-ordination Authority in its meeting scheduled in Kabul on June 2.
Diversity exists in practice in accounting for financial guarantee insurance contracts by insurance enterprises under FASB Statement No.
The European Commission does not want a solidarity fund aimed to compensate victims of damage caused by ships which have no financial guarantee in case of an accident.
Zurich PDG - exclusively available through the XBond Company - is a new financial guarantee that enables homebuyers to secure a property by guaranteeing the required deposit with a simple cost effective new product.

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