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 ?
Once the Beneficiary has assigned its rights under the Guarantee the assignee steps into the shoes of the Beneficiary and all rights of the Beneficiary vest in the assignee.
At the same time, the aggregate number of guarantees amounted to 102, down by a yearly 16.
cash or other property) from his son in exchange for entering into the guarantee agreement.
said the split on proposed changes to AG 38 is between the companies that manufacture the UL product with secondary guarantees and the companies that don't manufacture it.
We screamed to Congress in the 1980s about junk bonds and the Pension Benefit Guaranty Corporation certifying terminated plans and letting them buy annuities and shift the burden to life guarantee funds.
And there's no question that this aspect of the program has worked: More than $32 billion of America's overseas agricultural sales have been made with the help of USDA loan guarantees since the program began in 1980.
There may be no guarantees in life, bu tone security firms is guaranteeing the performance of its guards.
As far as regional distribution is concerned, the guarantee industry in East China develops far ahead of that in West China.
166-9(d) states that, to deduct these payments, the guarantor must have entered into the guarantee in the course of his trade or business or in a transaction entered into for profit.
In evaluating your current guarantee, consider these recommendations:
Sapp said that if a company raised prices after the guarantee period, its healthy customers would flee to another company and the original insurer would be left with the unhealthy.