A guarantee is a legally binding agreement in which one party, known as the guarantor, promises to assume responsibility for the debt, obligation, or performance of another party, known as the debtor or obligor, in the event of default. By providing a guarantee, the guarantor essentially agrees to pay the debt or fulfil the obligation if the debtor fails to do so. Guarantees are commonly used in various financial transactions, such as loans, leases, and contracts, to provide assurance to lenders, landlords, and other parties. They can take various forms, including personal guarantees, corporate guarantees, and limited guarantees, and typically involve specified terms and conditions outlining the rights and obligations of the parties involved.
To accept responsibility for an obligation if the entity with primary responsibility for the obligation does not meet it.
- 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).
- the promise to pay another’s debt or fulfil contract obligations if that party fails to pay or perform.
- n. occasionally, the person to whom the guarantee is made.
- a promise to make a product good if it has some defect.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 29th March 2024.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
- Page URL:https://dlssolicitors.com/define/guarantee/
- Modern Language Association (MLA):Guarantee. dlssolicitors.com. DLS Solicitors. April 30 2024 https://dlssolicitors.com/define/guarantee/.
- Chicago Manual of Style (CMS):Guarantee. dlssolicitors.com. DLS Solicitors. https://dlssolicitors.com/define/guarantee/ (accessed: April 30 2024).
- American Psychological Association (APA):Guarantee. dlssolicitors.com. Retrieved April 30 2024, from dlssolicitors.com website: https://dlssolicitors.com/define/guarantee/