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A form of {{t|credit support}} where one chap agrees to make good the obligations of another chap to a third party, if the second chap can’t or won’t. | A form of {{t|credit support}} where one chap agrees to make good the obligations of another chap to a third party, if the second chap can’t or won’t. | ||
== | ===Types of [[guarantee]]=== | ||
There's a saying in legal circles: [[anus matronae parvae malas leges faciunt]]: ''little old ladies make bad law''. | There's a saying in legal circles: [[anus matronae parvae malas leges faciunt]]: ''little old ladies make bad law''. | ||
In the history of the common law, more [[little old ladies]] than you’d expect seem to have given [[guarantee]]s.The common law is therefore littered with well-meaning judgments applying (and, frankly, making up) idiosyncratic, counter-intuitive and at times plainly stupid rules just to let little old lady-guarantors off the hook. | In the history of the common law, more [[little old ladies]] than you’d expect seem to have given [[guarantee]]s.The common law is therefore littered with well-meaning judgments applying (and, frankly, making up) idiosyncratic, counter-intuitive and at times plainly stupid rules just to let little old lady-guarantors off the hook. | ||
This means it is a minefield for lawyers. You know what you find in mines: GOLD. So a guarantee is a place, like no other, where you need {{tag|magic words}} | This means it is a minefield for lawyers. You know what you find in mines: GOLD. So a guarantee is a place, like no other, where you need {{tag|magic words}}. | ||
===[[Continuing guarantee]]=== | ====[[Continuing guarantee]]==== | ||
{{Continuing guarantee description}} <br /> | {{Continuing guarantee description}} <br /> | ||
===[[Demand guarantee]]=== | ====[[Demand guarantee]]==== | ||
{{Demand guarantee description}} <br /> | {{Demand guarantee description}} <br /> | ||
===[[Indemnity]]=== | ====[[Guarantee]] vs [[Indemnity]]==== | ||
Not, strictly speaking, a guarantee at all, but a contractual obligation having a similar economic effect is the [[indemnity]]. Note the [[statute of frauds]] doesn’t apply to an indemnity - which is why it’s traditionally seen as a useful thing to attach to a guarantee.<br /> | Not, strictly speaking, a [[guarantee]] at all, but a contractual obligation having a similar economic effect is the [[indemnity]]. Note the [[statute of frauds]] doesn’t apply to an [[indemnity]] - which is why it’s traditionally seen as a useful thing to attach to a guarantee.<br /> | ||
===[[Assignment]] of a [[Guarantor]]’s rights=== | ===Negotiation points=== | ||
A Guarantor has certain rights it acquires at law, even where it executes as a deed (such as the right of subrogation), and there is a risk that a [[ | ====[[Assignment]] of a [[Guarantor]]’s rights==== | ||
A Guarantor has certain rights it acquires at law, even where it executes as a deed (such as the right of subrogation), and there is a risk that a [[guarantor]] who assigns these rights might somehow mysteriously compromise a beneficiary’s rights under the guarantee. So, to be sure, limit that right of assignment. | |||
===A cautionary tale: parental guarantees under the {{isdama}}=== | ===A cautionary tale: parental guarantees under the {{isdama}}=== | ||
{{isdaguaranteewarning}} | {{isdaguaranteewarning}} | ||