guarantee

(redirected from guarantees)
Also found in: Dictionary, Thesaurus, Medical, Legal, Encyclopedia.
Related to guarantees: Financial Guarantees, Bank Guarantees

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 ?
A Bank Guarantee under UAE law cannot be for an undefined amount and should contain the fixed amount for which the Bank Guarantee is being provided.
At the same time, the aggregate number of guarantees amounted to 102, down by a yearly 16.
For the guarantee of a nonfamily member's debt, the consideration can be either direct (i.
Fassel, whose team cashed in when it didn't lose again until the Super Bowl, has been asked this season whether he'll make another guarantee.
3 million disabled veterans, why should the government guarantee health care for all enrolled veterans?
The SBA was ordered to lower its loan guarantee on export loans to small businesses from 90% to 75%.
In considering the request for $1 billion in additional CCC export credit sales guarantees for Iraq for fiscal 1990, Federal Reserve reservations were based on continued concerns about Iraq's creditworthiness at that time.
The pension sponsors aren't offering the guarantees, and many are even removing the word "guarantee" from the name of the funds that hold GICS.
It's a lot of work for us but, if we're going to be in this business, we guarantee it," said Leach.
All guarantees are based upon the claims-paying ability of the insurer).