guaranty Hear it!

guaranty definition - finance
A contract whereby one person or corporation becomes liable to perform a specific act or duty for another person or corporation if that person or corporation doesnÂ’t fulfill a responsibility. The responsibility usually is financial. For example, a corporation may guarantee that its subsidiary will fulfill the terms of a contract that the subsidiary signs with one of its customers.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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