GUARANTY Meaning and
Definition
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Guaranty, also spelled as "guarantee", is a noun that refers to a promise or assurance made by one party to another, regarding the fulfillment or repayment of a debt, obligation, or agreement. In this context, the individual providing the guarantee, known as the guarantor, agrees to be responsible for the performance of a specified action or the payment of a certain amount of money if the original party (the debtor or borrower) fails to fulfill their obligations.
A guaranty serves as a form of security, providing the creditor or lender with additional reassurance that they will receive their due payment or be compensated for any losses in case the primary party defaults. It establishes a legally binding commitment that can be relied upon in situations of non-compliance or breach of contract. Guarantees can be utilized in various contexts, such as loans, contracts, leases, or even personal commitments.
The specific terms and conditions of a guaranty are typically outlined in a written agreement or contract, which specifies the scope of the guarantor's responsibilities, the limits of liability, and any additional provisions or conditions that may apply. The guaranty may be limited or unlimited, depending on the circumstances and the parties involved.
Overall, a guaranty ensures financial security and encourages trust between parties involved by offering an additional layer of protection against potential default or non-performance.
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• An engagement to see certain stipulations performed; the person or party who does so.
• To engage that certain stipulations shall be performed; to undertake to secure to another; to make certain.
Etymological and pronouncing dictionary of the English language. By Stormonth, James, Phelp, P. H. Published 1874.
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Other Common Misspellings for GUARANTY
Etymology of GUARANTY
The word "guaranty" derives from the Old French term "garantie", which dates back to the 14th century. "Garantie" originated from the Old French verb "garantir", meaning "to protect" or "to warrant". This verb, in turn, can be traced back to the Frankish language, where it was derived from the Germanic word "warjan", which means "to protect" or "vouch for". Eventually, the spelling of "garantie" evolved into "guaranty" in English, but the pronunciation remained similar. Overall, the etymology of the word suggests its concept of providing a guarantee or assurance for something.
Similar spelling words for GUARANTY
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