Legal Question in Business Law in Florida

Re: personnal guarantee

guaranty (gar-<>n-tee), n. 1. A promise to answer for the payment of some debt, or the performance of some duty, in case of the failure of another who is liable in the first instance. � The term is most common in finance and banking contexts. While a warranty relates to things (not persons), is not collateral, and need not be in writing, a guaranty is an undertaking that a person will pay or do some act, is collateral to the duty of the primary obligor, and must be in writing. On the spelling of guaranty vs. guarantee, see the quotation at GUARANTEE (2). -- Also termed guaranty contract. [Cases: Guaranty 1.]

"Both guaranty and warranty are undertakings by one party to another to indemnify the party assured against some possible default or defect. But a guaranty relates to the future, as a collateral promise designed to protect the promisee from loss in case another fails to perform his duty. A warranty relates to the present or past, and is an independent promise designed to protect the promisee from loss in the event that the facts warranted are not as the promisor states them to be when the contract is made. A warranty is broken as soon as it is made if the facts are not as represented, and is enforceable though oral; whereas a guaranty is not breached until a future default occurs, and is unenforceable unless in writing." Laurence P. Simpson, Handbook on the Law of Suretyship 23 (1950).

"A transaction of guaranty involves at least three parties: a promisor, a creditor (the person to whom the promise is made), and a debtor -- although at the time the promise is made, the person denominated the 'creditor' need not have extended the credit to the person denominated as the 'debtor.' The usual guaranty situation arises when the promisor makes a promise to the creditor either as to the solvency of the debtor or as to the payment of the debt." 38 Am. Jur. 2d Guaranty � 1, at 996 (1968).

absolute guaranty. 1. An unqualified promise that the principal will pay or perform. 2. A guarantor's contractual promise to perform some act for the creditor -- such as paying money or delivering property -- if the principal debtor defaults.

conditional guaranty. A guaranty that requires the performance of some condition by the creditor before the guarantor will become liable. [Cases: Guaranty 42.]

GUARANTOR.

irrevocable guaranty (i-rev-<>-k<>-b<>l). A guaranty that cannot be terminated unless the other parties consent. [Cases: Guaranty 24.]

limited guaranty. An agreement to answer for a debt arising from a single transaction. -- Also termed noncontinuing guaranty.

revocable guaranty. A guaranty that the guarantor may terminate without any other party's consent. [Cases: Guaranty 24.]

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