Guarantee Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Guarantee, written in plain English, along with examples of how it is used.
What is Guarantee?
(v) Guarantee is the act of assuming responsibility for the performance of an action or obligation of another person or entity, by agreeing to compensate the beneficiary in the event of such non performance.
History and Meaning of Guarantee
The history of guarantee dates back to early civilizations where personal promises of debts secured by one's own property were common. The term guarantee has its roots in the Old French word garantir, meaning to safeguard or to protect. Today, in the legal sense, guarantee refers to a promise or agreement that a particular obligation will be fulfilled, typically in the form of a written contract.
Examples of Guarantee
A parent may guarantee a loan for their child's college education. In the event that the child fails to repay the loan, the parent is responsible for making the payments.
A contractor may guarantee their work for a certain period of time. If any issues arise during that time, the contractor will fix them at no additional cost to the client.
A credit card company may guarantee the safety of its users' personal information. If there is a data breach, the company will take full responsibility and reimburse any fraudulent charges.
Legal Terms Similar to Guarantee
Surety: A person who takes on the legal responsibility to pay a debt or fulfill an obligation if the original debtor fails to do so.
Warranty: A guarantee made by a manufacturer or seller that promises the product sold is free from defects and will function as intended.
Indemnity: A promise to pay for any harm, damage or loss caused to another person or entity, often used in insurance contracts.