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Contract & Commercial Law vocabulary · Commercial Agreements

Guarantee

Meaning in contract & commercial law, with examples

/ˌɡærənˈtiː/nounCommon term

In contract & commercial law, guarantee means: A promise by one person or company, the guarantor, to pay another party's debt or perform its obligations if that party fails to do so.

In Turkish: kefalet, garanti, teminat

How it is used

Banks and suppliers often ask for a parent company guarantee or a personal guarantee from a director. A bank guarantee is a separate promise by a bank to pay on demand. The guarantor 'guarantees' the debtor's obligations.

Example sentences

  1. The parent company signed a guarantee for its subsidiary's lease payments.

  2. The buyer must provide a bank guarantee covering 10% of the contract price.

Common collocations

  • parent company guarantee
  • personal guarantee
  • bank guarantee
  • give a guarantee
  • call on a guarantee
  • warrantyA promise in a contract that a fact is true or that goods or services meet a certain standard; if it proves wrong, the other party can usually claim damages.
  • supplierA business that provides goods or services to another business, usually under a supply agreement or individual purchase orders.
  • liabilityLegal responsibility for something, especially the duty to pay compensation for loss or harm; in accounting, also a debt that a business owes.
  • retention of titleA clause in a sale contract stating that the seller keeps ownership of the goods until the buyer has paid for them in full.

More terms: Commercial Agreements

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This page explains English vocabulary for learners. It is not legal advice.