guarantee


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Related to guarantee: Guarantee letter

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 ?
Guarantee Insurance Company, subsidiary of Guarantee Insurance Group is licensed in over 31 states including the District of Columbia.
As such, the decrease in the value of guarantees accompanied by an even higher drop in the number of guarantees resulted in a decrease in the average value per guarantee over the said month by 10.
Individuals often guarantee relatives' loans as a personal favor and without direct consideration (i.
Therefore--apart from a small share of campus-based aid provided to schools based on reallocations of unused funds--the total allocation to each institution equals the base guarantee amount plus the fair share amount.
And at the same time, policyholders realize they have a valuable guarantee and so lapse less often than assumed in the pricing, so they can take advantage of the guarantee.
State your guarantee in the strongest possible terms.
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.
It merely guarantees the funds necessary for VA to fulfill its mission.
Larger companies seeking loans for more than $834,000 will continue to negotiate with the Ex-Im Bank, which still offers a 90% loan guarantee.
With regard to the Federal Reserve's position concerning the extension of CCC export credit sales guarantees for Iraq, even before the fiscal 1990 request for such guarantees, the Federal Reserve had become concerned about Iraq's creditworthiness and about the size of the programs of CCC export credit sales guarantees that were being proposed for Iraq by the U.
Some insurers are now asking regulators if they can do separate accounts with a minimum guarantee.
Ironically, the first complaints about abuse in the USDA guarantee program came, not from government auditors, but from high-ranking Iraqi officials, who in early 1986 claimed to have received a blend of American and cheaper Brazilian tobacco when they had paid for-rather, borrowed the money for-all-American tobacco.