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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

guarantee

see QUALITY.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005

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.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
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.
There are further doubts over Curitiba as a host city, also due to financial guarantees.
BEIRUT: Kafalat, a state-sponsored organization that provides financial guarantees for loans to the private sector, extended to small- and medium-sized companies a line of credit worth $55.4 million in the first five months of 2008, up by a noteworthy 91.1 percent from the same period of the previous year.
The warrants were issued several years later, in consideration of the increased risks assumed by the shareholders/directors under the terms of the loan and other financial guarantees. The Tax Court held the warrants were not issued "in connection" with the performance of services; thus, the company was not entitled to a compensation deduction.
Being able to make financial guarantees to students based on publicized criteria (e.g., merit scholarships based on academic records, or need-based aid guarantees for those with incomes below a certain level) can help keep those students interested long enough to put together a full financial aid award for their family's consideration.
The new regulations also provide guidance on the ownership of intangibles, modify the profit split method, and clarify that financial guarantees provided by related parties are not services transactions.
Merton, 1992, "On the Management of Financial Guarantees", Financial Management, 21:87-109
Stade are understood to have already sold 20,000 tickets for the game and the Falcons are happy to go along with the switch ( which will be formally announced today ( provided they are given the necessary financial guarantees with regard to gate takings.
We believe this would be the case because the prohibition against transferors entering into financial guarantees with SPEs [special-purpose entities] or BIHs [beneficial interest holders] would render as 'non-qualifying' the SPEs used in those securitizations, and because of the additional prohibitions on the types of assets a QSPE may hold.
Greece has announced that it will try to find private investors to put money into the troubled airline, after a privatisation effort failed when bidders could not find the necessary financial guarantees. The government has also announced that around 2,000 employees will be laid off and routes will be cut.
And they require mines--new or existing--to provide financial guarantees, or bonds, that cover the cost of reclamation (as estimated by BLM staff) after a mine closes.

Full browser ?