Definition - What does Guarantee mean?

The term guarantee (also "guaranty") can be defined as an agreement to perform someone else’s duty or pay someone else’s debt if that person fails to pay it. Guarantee may also refer to the document in which this kind of arrangement is decided.

Justipedia explains Guarantee

This can be explained with the following example: when you co-sign a loan, you are actually giving a guarantee that in case the primary borrower is unable to repay his or her debts, you will be legally responsible. The person who signs the guarantee is known as the guarantor. The terms "warranty" and "guaranty" also mean the same thing.

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