guarantee

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Related to Financial Guarantee: Financial guarantee insurance

Guarantee

The assumption of responsibility for payment of a debt or performance of some obligation if the liable party fails to perform to expectations.

Guarantee

A promise made by a third party to provide payment on a bond, loan, or other liability in the event of default. While many guarantees apply to debt instruments, they may also be used in day-to-day life. For example, a parent may sign a guarantee with a rental agency promising to pay rent on behalf of an adult child if he/she does not do it. Banks often make guarantees on behalf of certain clients, but, just as often, private parties make guarantees to banks to promise payment on private loans. Guarantees reduce the risk to loans and liabilities, and usually improve the credit agency ratings of bonds.

guarantee

or

warranty

a legally binding promise by the seller of a product to the purchaser that in the event of the product failing to work properly the seller will either replace or repair it free of charge, or refund the purchase price. Guarantees and warranties usually operate for a limited time-period from the date of purchase, though some products like cars may relate guarantee conditions to both time and mileage. Guarantees and warranties are an important means of promoting a product, in so far as they assure the buyer about the product's expected QUALITY and reliability. See CUSTOMER SERVICE, MARKETING MIX.

guarantee

see QUALITY.

guarantee

The act itself,or also the document,whereby one agrees to pay a debt if the principal obligor does not. Under common law, creditors had to exhaust their remedies against a debtor before pursuing a guarantor.Today, almost all guarantee instruments contain clauses allowing the creditor to seek payment directly from the guarantor if there has been a default by the debtor. Guarantee agreements must be in writing to be enforceable.Usually,there must be some consideration passing to the guarantor unless the instrument creating the obligation (note, lease) is signed at the same time as the guarantee,in which case the law assumes the guarantor has some interest in the transaction.

References in periodicals archive ?
Guided by a vision to succeed and a mission to serve the community, it provides one-stop financial services including financial guarantees, small loans, financial consultancy, financial leasing and equity investments.
The new standard provides guidance both for governments that extend financial guarantees and for governments that benefit from them.
The premium revenue recognition approach for a financial guarantee insurance contract links premium revenue recognition to the amount of insurance protection and the period in which it is provided.
Yasuda Kasai Financial Guarantee will shortly obtain a license from financial authorities and begin operating by the end of this year, the parent company said.
The increased incidence of financial guarantee arrangements between governments--and their potential to result in payments by the guarantor--prompted the need for consistent recognition and disclosure guidance," said GASB Chairman Robert H.
AGM" and, together with AGE, "Assured Guaranty"), it provided a financial guarantee with respect to a UK Private Finance Initiative ("PFI") bond issue, originally issued by Worcestershire Hospital SPC Plc on March 31st 1999 to raise 97.
Although the Statement does not apply to financial guarantees written in credit default swap form, we plan to voluntarily provide disclosure on our CDS exposures that will be similar to that we will provide on our financial guarantee insurance policy exposures.
Instruments whose rights and obligations are conditional on events beyond the control of either party to the contract (for example, in a financial guarantee, the conditional event that could take place might be default on some other contract by a third party).
NYSE: ABK) ("Ambac") announced today that its financial guarantee insurance subsidiary, Ambac Assurance Corporation ("Ambac Assurance"), has entered into a commitment to reinsure to Assured Guaranty Re Ltd.
Furthermore, the contracting authority will require at the signing of the financial guarantee for the proper execution of the work in the amount of 6,000,000 CZK and at the handover of the financial guarantee for the quality of 2,000,000 CZK.
First graph, second sentence of release should read: The proposal, Accounting for Financial Guarantee Insurance Contracts an interpretation of FASB Statement No.
Deposits and Guarantees required: no provision of financial guarantee will be applied.

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