Guarantee

A guarantee is a contractual promise by a third party to fulfill obligations if the primary party defaults, commonly used in leases and construction contracts.


Guarantee TypeApplication
Payment guaranteeEnsures rent or purchase payments
Performance guaranteeCompletion of work obligations
Bank guaranteeFinancial institution backing
Personal guaranteeIndividual assumes liability
Legal ElementsRequirement
Written formMust be documented
ConsiderationValue exchanged
Specific obligationsClearly defined
Liability limitMay be capped

Related Terms

Performance BondPersonal GuaranteeSecurity Deposit Indemnity Clause

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