guarantee

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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 ?
Often, financial guarantees are an important part of these securities.
It takes time to put the necessary financial guarantee in place to be able to avail of this procedure though, so whether youre a cement manufacturer exporting to Germany or a florist whose flowers come from Holland through the UK, I would urge businesses to start consulting with their bank or financial providers and Revenue straight away.
"More than 65 nominations were rejected due to lack of a financial guarantee and the necessary sponsorships," he pointed out.
AGE guarantees timely payment of scheduled principal and interest to bondholders throughout the life of the bonds, in accordance with the terms of its financial guarantees.
The sources explained that the financial guarantee is done through the state providing official guarantees to investors in order to ensure that the government would pay any financial obligations, which are failed to be met by a company involved in the contract.
The company's credit linkage to the sovereign is further evidenced by the explicit support of the government through a financial guarantee for up to US$1 billion to finance the modernization of the Talara refinery (PMRT).
In conjunction with the update, RAM has also renamed the terminology used to assign ratings to insurance companies, from claims-paying ability rating (applicable to most entities in the insurance industry) and financial enhancement rating (applicable to financial guarantee insurers) to insurer financial strength (IFS) rating.
The TMC financial guarantee is an industry agnostic financing enhancement tool that provides security to investors and lender for both domestic and international projects.
Al Khaiaili said: "Should the visitor exceed the duration of his stay in the country, he (the applicant), won't be able to retrieve the financial guarantee for violating the regulations and laws on the basis of which the entry permit was issued."
"Should the visitor exceed the duration of his stay in the country, he [the applicant], won't be able to retrieve the financial guarantee for violating the regulations and laws on the basis of which the entry permit has been issued," he added.
We have diversified into financial consultancy, financial leasing and equity investment businesses by building on the existing financial guarantee and small loans lending businesses.
Earlier, she was charged sheeted in accusation of illegally returning financial guarantee to contractor who was given contract of construction of IJ Principle Road.

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