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 ?
Gendron, 1994, "On Financial Guarantee Insurance Under Stochastic Interest-Rates", Geneva Papers On Risk and Insurance Theory, 19:119-137
* that financial guarantees under proposed new paragraph 35.e.
"There's no town or senior government money involved, other than administrative support and financial guarantees from the town," he says.
In addition, in this tight market many smaller tenants are having to provide substantial financial guarantees or security in order to compete for space.
The society wants financial guarantees from the state that any shortfall would be covered if the tribunal does not award it full costs.
International Insurance Law Journal includes coverage of all international and comparative issues related to life and non-life insurance and insurers; reinsurance; agents and brokers; offshore and captive insurers; financial guarantees, asset management and finance for insurance companies; products and marketing and risk management.
Are companies adequately disclosing information about the new financial instruments with off-balance-sheet risk--interest rate swaps, options written, forward interest rate contracts and financial guarantees? Some critics claim current information disclosed in the notes to financial statements is incomplete and not comparable.
Deposits and guarantees required: - financial guarantees and advances no financial guarantee clause will be applied.
AGE will continue as an active underwriter of financial guarantees, the company said and added that before being acquired by AGE, AGLN was the European operating subsidiary of MBIA Insurance Corporation.
The Ministry of Electricity sent a letter to the Ministry of Finance to issue financial guarantees for 30 solar power plants companies within the second phase of the feed-in tariff programme.
Summary: Customers to automatically retrieve financial guarantees or deposits without consulting with any entity
The financial guarantees and small loans business of the Group has maintained our leading position in the Guangzhou and Foshan area.

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