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 ?
* FAMILY LOAN GUARANTEES CAN CREATE simlar gift-related problems, as well as difficulties in valuing the guarantee, particularly if the loan would not have been made without it.
Clinton County Bio Energy is made up of a relatively small group of investors, so the opportunity provided by the USDA loan guarantee was critical, according to Daniel Holesinger, the facility's project manager.
First, we find in our model that loan guarantees are powerful in influencing allocations: Even modest limits on qualifying loan size invite very large borrowing--as perhaps intended by proponents.
4975(c)(1)(B), serving only to widen the scope of the prohibition to cover loan equivalents such as loan guarantees. Citing the Supreme Court's opinion in Keystone Consolidated Indus., Inc., 508 U.S.
Slovenia has extended loan guarantees worth a total EUR856.4m since June 2009 as part of its EUR1.2bn plan, aimed at reinforcing liquidity.
Since the Department of Energy's (DOE) loan guarantee program (LGP) for innovative energy projects was established in Title XVII of the Energy Policy Act of 2005, its scope has expanded both in the types of projects it can support and in the amount of loan guarantee authority available.
International Resource News-5 February 2010-United States DOE plans to sign conditional loan guarantees in six months(C)2010 ENPublishing - http://www.enpublishing.co.uk
The pounds 2.3 billion package of loan guarantees to UK car makers and large suppliers was announced in January, but "little progress has been made in releasing funds through this scheme," said a report today from the House of Commons Business Innovation and Skills Committee.
AAP, involving a pounds 2.3 billion package of loan guarantees to Britain's carmakers and large suppliers, was announced in January this year.
The facility - providing access to loans and loan guarantees totalling pounds 2.3billion, including pounds 1.3billion from the European Investment Bank - is designed to support investment in low-carbon skills and technology in the automotive sector.
The reduction of the guarantee fee can be applied for a maximum period of two years for loan guarantees contracted no later than 31 December 2010.
The approval by the EC enables the government to support up to pounds 1bn of loans and loan guarantees as well as loan guarantees through the European Investment Bank (EIB) enabling funding of up to pounds 1.3bn.