guaranty


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guaranty

a person who acts as a guarantor

Guaranty

 

in civil law an obligation, based on law or on contract, by which a natural or juridical person is fully or partially liable to a creditor in the case of nonfulfillment or improper fulfillment of an obligation by a debtor.

In Soviet law, guaranty is an independent measure to safeguard the fulfillment of obligations by socialist organizations. A legal form like the guaranty is necessary because other means of securing obligations, such as a forfeit fixed by the contract, a pawn, earnest money, and suretyship, cannot be used for certain obligations, in particular, obligations resulting from a bank loan contract.

The content of the guaranty obligation consists of the right of the bank to have its loan to the debtor organization paid off by the bank’s special order in nondisputable proceedings, either by writing off the sum from the account of the guarantor organization or by recovery from assets belonging to the latter. A subsidiary (not joint but supplementary) liability of the guarantor originates through the guaranty. The guarantor is obligated to fulfill the obligation in place of the debtor only when the latter has failed to satisfy the claim of the creditor. The extent of the guarantor’s liability is usually limited to the amount of payment missed by the debtor organization on the day when the claim of redemption of the loan is presented.

The guaranty may secure an actual or a potential claim of the creditor toward the debtor; it is used as a means of securing the fulfillment of the obligation and as a credit sanction.

E. G. POLONSKII

References in periodicals archive ?
Each state has a life and health guaranty association that's walled off from the property-casualty guaranty association, and the life and health associations separate health obligations from life and annuity obligations.
Guaranty was advised in this transaction by Sandler + O'Neill Partners, L.
A Guaranty representative declined to comment on the suit.
To accomplish the goals of the College Access Initiative, the National Council of Higher Education Loan Programs (NCHELP) is facilitating a workgroup representing 24 guaranty agencies.
The middle of the road form of Good Guy Guaranty requires delivery of possession with all monetary obligations fulfilled through the date of delivery of possession but without the requirement to fulfill performance obligations.
Emergency legislation was enacted to allow the state guaranty association to borrow money from the Alaska Development Corp.
At the trial level, the court entered a summary judgment on behalf of the defendant guarantors, finding that the guaranty was special in nature and could not be assigned.
Since direct lending eliminates all the subsidies to banks, guaranty agencies, and other intermediaries, it is bound to bring significant savings.
They then made the leap of logic that because the defaults had been waived, Bentley had never been in default, and consequently, the guaranty automatically terminated.