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 ?
Mortgage insurance gives the borrower the opportunity to get into a home with less money down," said Len Sweeney, senior vice president of strategic planning and corporate development for United Guaranty.
Use of the guaranty as a credit enhancement in leasing transactions has recently become a matter of heightened interest, as the use of limited liability companies and other sophisticated techniques for reducing recourse liability becomes widespread.
Bush, who will continue to serve as president of the New Orleans area operation and will join the board of directors of Deposit Guaranty National Bank of Louisiana, said he is looking forward to the benefits of the merger.
Parties to a contract such as an interest guaranty have great flexibility to agree on terms.
Currently, the majority of the financial guaranty industry rated by Fitch maintained more than enough capital to meet the minimum capital requirements for their given rating threshold.
The agreement calls for shares of Deposit Guaranty Corp.
The Matrix model builds on existing stochastic methodologies used in modeling bond portfolio defaults and recoveries that have been in place for the past few years within both the financial guaranty sector and structured finance asset classes, including collateralized debt obligations (CDOs).
1, the bank will operate as a branch of Deposit Guaranty National Bank of Louisiana in Hammond.
Under the terms of the agreement, First Guaranty Bancshares will acquire all of the issued and outstanding shares of common stock of Homestead Bancorp for the cash purchase price of $17.
Robinson said the merger with Jefferson Guaranty will complement other recent acquisitions in south Louisiana, including Hammond, Gonzales and a pending merger in Denham Springs.
The bank will retain its management after the acquisition and will operate as a branch of Deposit Guaranty National Bank of Louisiana in Hammond.
In his most recent position prior to joining Assured Guaranty, Mr.