What is a guarantee?

A guarantee (or guaranty) is a promise made by one party to pay the debts or perform the obligations of another party, and is usually provided as an inducement to have a lender or a landlord enter into an agreement with the first party. The guarantor is usually a related party - in the case of a company, this would mean a director, shareholder, partner, etc. In the case of an individual, it would be a spouse or family member.

The foregoing summary is provided for information purposes only and is not to be considered legal or business advice. The information may not be complete, accurate or applicable for any particular situation and should not be relied upon.

[close]