Guaranty

Guaranty in United States

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Guaranty Definition

An undertaking to answer for another’s liability, and collateral thereto. A collateral undertaking to pay the debt of another in case he does not pay it. Shaw, C. J., 24 Pick. (Mass.) 252. 194 111. App. 514. It is distinguished from suretyship in being a secondary, while that is a primary, obligation; or, as sometimes defined, guaranty is an undertaking that the debtor shall pay; suretyship, that the debt shall be paid. The undertaking is essentially in the alternative. A guarantor cannot be sued as a promisor, as the surety may; his contract must be specially set forth. A guarantor warrants the solvency of the promisor, which an indorser does not. 8 Pick. (Mass.) 423. Guaranty, as distinguished from suretyship, is an independent contract, while the surety is bound jointly with his principal. A contract of suretyship is a direct liability for the act to be performed by the debtor, and a guaranty is a liability only for his ability to perform the act. 52 Pa. St. 440. As distinguished from indemnity, in that a principal obligation is essential to guaranty, while indemnity may be a primary contract. Guaranties are either:
(1) General, running to any person dealing with the principal.
(2) Special, to a particular person.
(3) Limited, i. e., covering only a particular transaction.
(4) Continuing, applicable to a class of future transactions.
(5) Absolute, conditioned only on the default of the principal.
(6) Conditional, dependent on some extraneous condition.

Guaranty in Foreign Legal Encyclopedias

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Guaranty Guaranty in the World Legal Encyclopedia.
Guaranty Guaranty in the European Legal Encyclopedia.
Guaranty Guaranty in the Asian Legal Encyclopedia.
Guaranty Guaranty in the UK Legal Encyclopedia.
Guaranty Guaranty in the Australian Legal Encyclopedia.

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Guaranty Guaranty in the Family Law Portal of the American Encyclopedia of Law.
Guaranty Guaranty in the IP Portal of the American Encyclopedia of Law.
Guaranty Guaranty in the Commercial Law Portal of the American Encyclopedia of Law.
Guaranty Guaranty in the Criminal Law Portal of the American Encyclopedia of Law.
Guaranty Guaranty in the Antritrust Portal of the American Encyclopedia of Law.
Guaranty Guaranty in the Bankruptcy Law Portal of the American Encyclopedia of Law.
Guaranty Guaranty in the Constitutional Law Portal of the American Encyclopedia of Law.
Guaranty Guaranty in the Tax Law Portal of the American Encyclopedia of Law.
Guaranty Guaranty in the and Finance and Banking Portal of the American Encyclopedia of Law.
Guaranty Guaranty in the Employment and Labor Portal of the American Encyclopedia of Law.
Guaranty Guaranty in the Personal Injury and Tort Portal of the American Encyclopedia of Law.
Guaranty Guaranty in the Environmental Law Portal of the American Encyclopedia of Law.

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Resource Description
Guaranty in the Dictionaries Guaranty in our legal dictionaries
https://lawi.us/guaranty The URI of Guaranty (more about URIs)
Guaranty related entries Find related entries of Guaranty

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Legal Issue for Attorneys

An undertaking to answer for another’s liability, and collateral thereto. A collateral undertaking to pay the debt of another in case he does not pay it. Shaw, C. J., 24 Pick. (Mass.) 252. 194 111. App. 514. It is distinguished from suretyship in being a secondary, while that is a primary, obligation; or, as sometimes defined, guaranty is an undertaking that the debtor shall pay; suretyship, that the debt shall be paid. The undertaking is essentially in the alternative. A guarantor cannot be sued as a promisor, as the surety may; his contract must be specially set forth. A guarantor warrants the solvency of the promisor, which an indorser does not. 8 Pick. (Mass.) 423. Guaranty, as distinguished from suretyship, is an independent contract, while the surety is bound jointly with his principal. A contract of suretyship is a direct liability for the act to be performed by the debtor, and a guaranty is a liability only for his ability to perform the act. 52 Pa. St. 440. As distinguished from indemnity, in that a principal obligation is essential to guaranty, while indemnity may be a primary contract. Guaranties are either:
(1) General, running to any person dealing with the principal.
(2) Special, to a particular person.
(3) Limited, i. e., covering only a particular transaction.
(4) Continuing, applicable to a class of future transactions.
(5) Absolute, conditioned only on the default of the principal.
(6) Conditional, dependent on some extraneous condition.

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Notice

This definition of Guaranty is based on The Cyclopedic Law Dictionary. This entry needs to be proofread.

Practical Information

Note: Some of this information was last updated in 1982

(The term is used interchangeably with suretyship by courts and lawyers as well as laypersons.) A contract of guaranty or of suretyship is a contract whereby one person agrees to be responsible to another for the payment of a debt or the performance of a duty by a third person. It must be in writing and is not enforceable if made orally. The term guaranty (or guarantee) is often loosely used in the sense of warranty (in U.S. law). In a strict legal and commercial sense, it is the essence of a contract of guaranty that there should be a principal, liable directly to perform some act or duty. An agreement by a third party guaranteeing the honest and faithful performance of a contract of sale is a contract of guaranty; an agreement in a sales contract “guaranteeing” the efficient performance of a product for a certain number of years is a contract of warranty. The words guarantee and guaranty are frequently used incorrectly. For the verb, always use guarantee. Business convention has established a specialized use of guaranty as a noun, as illustrated above. However, guarantee is never wrong, even in these expressions. A safe rule to follow is: When in doubt, use guarantee.

(Revised by Ann De Vries)

What is Guaranty?

For a meaning of it, read Guaranty in the Legal Dictionary here. Browse and search more U.S. and international free legal definitions and legal terms related to Guaranty.

Guaranty in State Statute Topics

Introduction to Guaranty (State statute topic)

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Guaranty: Open and Free Legal Research of US Law

Federal Primary Materials

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Legislative history traces the legislative process of a particular bill (about Guaranty and other subjects) for the main purpose of determining the legislators’ intent behind the enactment of a law to explain or clarify ambiguities in the language or the perceived meaning of that law (about Guaranty or other topics), or locating the current status of a bill and monitoring its progress.

State Administrative Materials and Resources

State regulations are rules and procedures promulgated by state agencies (which may apply to Guaranty and other topics); they are a binding source of law. In addition to promulgating regulations, state administrative boards and agencies often have judicial or quasi-judicial authority and may issue administrative decisions affecting Guaranty. Finding these decisions can be challenging. In many cases, researchers about Guaranty should check state agency web sites for their regulations, decisions, forms, and other information of interest.

State rules and regulations are found in codes of regulations and administrative codes (official compilation of all rules and regulations, organized by subject matter). Search here:

State opinions of the Attorney General (official written advisory opinions on issues of state law related to Guaranty when formerly requested by a designated government officer):

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