guarantee

(redirected from Financial Guarantees)
Also found in: Dictionary, Thesaurus, Legal, Encyclopedia.

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 source explained that the financial guarantees are the remaining step for companies to present their paperwork to banks to begin implementing the projects, noting that many companies are now processing permanent licenses for production of electricity.
Lt Col Mattar Kharbash, head of the Team Supporting Smart e-transition at the Naturalisation, Residency and Ports Sector, indicated that banks operating in the country have different time frames for refunding the financial guarantees to their customers, in accordance with the work mechanisms adopted by the banks that issued the e-payment cards to customers.
The financial guarantee business entered into a critical period of transformation in the first half of 2015.
70 requires that beneficiaries of financial guarantees continue to recognize the full amount of their obligation until they are legally released from it, at which time they would recognized revenue.
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).
A government guarantor or issuer to disclose information about the amounts and nature of nonexchange financial guarantees.
Success Finance mainly provides financial guarantees to SMEs to assist them in obtaining loans from banks or other financial institutions.
These risks and uncertainties include, but are not limited to, those resulting from the Company's inability to execute its strategies; the demand for the Company's financial guarantees, further actions that the rating agencies may take with respect to the Company's financial strength ratings; adverse developments in the Company's insured portfolio; and other risks and uncertainties that have not been identified at this time, management's response to these factors, and other risk factors identified in the Company's filings with the U.
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.

Full browser ?