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 ?
Assured Guaranty said BlueMountain will be the company's largest investment outside the financial guaranty sector.
Few guaranty associations require member insurers to pay large insurer failure protection premiums on a regular basis.
"Our concept was to have kind of like an RV truck stop - a 'rejuvenation station' where people could come and get refreshed, could get their service work done, get things at the travel center (such as) groceries and propane," Guaranty property manager Marty Nill said.
But the good guy guaranty is fraught with tremendous downside and a signatory who thinks she is signing a guaranty for a fixed sum may be very unpleasantly surprised when her liability far exceeds her expectations: Here are some of the pitfalls:
In some construction loans, the guaranty amount may decline or "bleed off" once construction is complete and/or some level of occupancy is obtained, reflecting the improvement in the bank's collateral position.
Could the failure of one health insurer somehow lead to a series of failures, by exposing solvent but shaky insurers to big guaranty association assessment bills at the worst possible time?
Generally, a personal guaranty is unconditional, meaning the vendor has no obligations beyond demanding payment from the guarantor upon the invoices becoming past due.
The insolvency of American Mutual, which distributed $110 million to guaranty funds in 2011, was court-approved to put away an additional $50 million in 2011.
MOR vision users now have a custom-designed screen where they can submit MI data directly to United Guaranty as well as receive MI rate quotes and MI certificate attachments, which are auto-populated into the appropriate MOR vision loan files.
To recap, in the nearly 20 years since the guaranty system, regulators, and the life industry all agreed that death benefits in these accounts are covered by guaranty associations, the only suggestion to the contrary now arises from one or two consumer advocates advocating against consumers receiving guaranty association protection.
But unlike earlier versions of the bill, the new measure also would create a National Insurance Guaranty Corp.
A key element of that balance is the low-cost structure of state-based guaranty funds that helps protect people and small businesses least able to absorb the impact of an uninsured loss related to a property and casualty insurer insolvency.