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 ?
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.
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 is the first company to specialize in the financial guarantor business in Japan.
A nonexchange financial guarantee is a credit enhancement or assurance offered by a guarantor (the government or organization that offers the guarantee), that is provided without receiving consideration of equal value.
The financial guarantees and small loans business of the Group has maintained our leading position in the Guangzhou and Foshan area.
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.
Deposits and Guarantees required: No financial guarantee shall be required for payment to the holder of the advance.
39 to credit derivatives and financial reinsurance, financial guarantee and commodity contracts, definitions of derivatives and originated loans, accounting for embedded derivatives, and accounting for transfers of financial assets and portions of financial assets (for instance, in securitizations).
163, Accounting for Financial Guarantee Insurance Contracts, by the Financial Accounting Standards Board (FASB) on Friday, May 23, 2008, which clarifies how FASB Statement No.
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).

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