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 ?
For this reason, lenders should be prepared to enforce a guarantee provided by a KSA entity in the KSA.
While there are various factors for lenders to consider before relying on a guarantee, appropriately drafted guarantees can be an important aspect of a security package.
To understand a counter guarantee, the key issue is identifying its
While some clients may be tempted at this option, clients should be advised of the downside--namely, losing the lifetime income guarantees that may have first attracted them to the product.
In fact, 44% of pharmacists working in pharmacies with time guarantees reported a dispensing error they were personally involved in that was directly attributed to rushing to fulfill the guarantee.
Typically, for all main areas of collecting (paintings and sculptures from 1700 up until Contemporary Art, Design, Chinese works of art and wine), Art Auction Guarantee will guarantee the acquisition price against the payment of a reasonable fee (ranging from 5 to 7.5% of the acquisition price).
Then I walk them through the incredible guarantees provided by our products.
In the past leases have often been taken by smaller companies with a guarantee from the parent company used to give the landlord sufficient comfort that his rent will be paid.
It is thought that only a quarter of businesses have accepted a cheque backed by a cheque guarantee card during the past six months.
A year later, the company approached the Minister of Finance to waive the annual levy and the second guarantee amount was granted with an effort to fulfil Cabinet's decision to provide support to Seaflower Whitefish Corporation.
A service guarantee can "close the loop" between responding to service failures and taking the measures necessary to keep problems from occurring in the first place.
Currently, notes LIMRA, two types of in-plan guarantees are sold: the guaranteed lifetime withdrawal benefit (GLWB) and the deferred income annuity (DIA).