surety
American Heritage Dictionary:
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sur·e·ty
(shʊr'ĭ-tē) 
n., pl., -ties.
n., pl., -ties.
- The condition of being sure, especially of oneself; self-assurance.
- Something beyond doubt; a certainty.
- A pledge or formal promise made to secure against loss, damage, or default; a security.
- One who has contracted to be responsible for another, especially one who assumes responsibilities or debts in the event of default.
[Middle English surte, from Old French, from Latin sēcūritās, from sēcūrus, sure. See secure.]
suretyship sur'e·ty·ship' n.Barron's Banking Dictionary:
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Surety
Guaranty of debt repayment or fulfillment of contractual obligation. Borrowers unable to obtain credit under their own name often have a third party sign the application. Under a surety agreement, the lender can look first to the surety or guarantor for payment if the borrower defaults. A surety who pays a borrower's debt takes an assignment of the creditor's rights through Subrogation and can attempt to recover that payment from the borrower.
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One who guarantees the performance of another.
Example: Ridley employs a contractor to construct a house.
Under the contract , the contractor is required to obtain a performance bond against failure to perform the work. Ace Bonding Co. provides the bond, thereby acting as a surety. Should the contractor fail to perform, Ace compensates Ridley for damages.
Example: Ridley employs a contractor to construct a house.
Under the contract , the contractor is required to obtain a performance bond against failure to perform the work. Ace Bonding Co. provides the bond, thereby acting as a surety. Should the contractor fail to perform, Ace compensates Ridley for damages.
| Supply and Demand, Superstructure | |
| Surface Rights, Surplus Land |
Roget's Thesaurus:
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surety
noun
- The fact or condition of being without doubt: assurance, assuredness, certainty, certitude, confidence, conviction, positiveness, sureness. See certain/uncertain.
- An assumption of responsibility, as one given by a manufacturer, for the quality, worth, or durability of a product: guarantee, guaranty, warrant, warranty. See obligation.
- One who assumes financial responsibility for another: backer, guarantor, guaranty, sponsor, underwriter. Informal angel. See law, support/oppose.
A person or organization who, for a consideration, promises in writing to make good the debt or default of another.
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This entry contains information applicable to United States law only.
An individual who undertakes an obligation to pay a sum of money or to perform some duty or promise for another in the event that person fails to act.
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When a guarantor or a sum of money is held as a guarantee for a loan in good faith.
Investopedia Says:
It is similar to a deposit on a loan or contract.
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Random House Word Menu:
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categories related to 'surety'
- Judges, Lawyers, and Others in the Court System - surety: person promising to make good another’s obligation
- Banking and Financial Services - surety: person liable for another’s debts
- Insurance - surety: guarantor, usu. insurance company
See crossword solutions for the clue Wikipedia on Answers.com:
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Surety
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The examples and perspective in this article may not represent a worldwide view of the subject. Please improve this article and discuss the issue on the talk page. (December 2010) |
A surety or guaranty, in finance, is a promise by one party to assume responsibility for the debt obligation of a borrower if that borrower defaults. The person or company that provides this promise, is also known as a surety or guarantor.
The situation in which a surety is most typically required is when the ability of the primary obligor or principal to perform its obligations to the obligee (counterparty) under a contract is in question, or when there is some public or private interest which requires protection from the consequences of the principal's default or delinquency. In most common law jurisdictions, a contract of suretyship is subject to the Statute of Frauds (or its equivalent local laws) and is only enforceable if recorded in writing and signed by the surety and the principal.
If the surety is required to pay or perform due to the principal's failure to do so, the law will usually give the surety a right of subrogation, allowing the surety to "step into the shoes of" the principal and use his (the surety's) contractual rights to recover the cost of making payment or performing on the principal's behalf, even in the absence of an express agreement to that effect between the surety and the principal.
Traditionally, a distinction was made between a suretyship arrangement and that of a guaranty. In both cases, the lender gained the ability to collect from another person in the event of a default by the principal. However, the surety's liability was joint and primary with the principal: the creditor could attempt to collect the debt from either party independently of the other. The guarantor's liability was ancillary and derivative: the creditor first had to attempt to collect the debt from the debtor before looking to the guarantor for payment. Many jurisdictions have abolished this distinction, in effect putting all guarantors in the position of the surety.
In the United States, under Article 3 of the Uniform Commercial Code, a person who signs a negotiable instrument as a surety is termed an accommodation party; such a party may be able to assert defenses to the enforcement of an instrument not available to the maker of the instrument.
In the United Kingdom the idea of a loan with a guarantor has been popularised over the last 3 years. Guarantor loans open a unique type of unsecured loan, which is not based on the credit history of the borrower. In fact it is quite the opposite, this loan is based on the credit standing of the person who will guarantee the payment of the loan in case the borrower defaults. Certain circumstances lead to a reduction of credit rating. Whenever a credit rating reduces and becomes poor it will not be very easy to obtain even a high rate bad credit loan. Having a guarantor will address the lender’s concern, and is a great way to regain the lost credibility in terms of obtaining credit.[1]
See also
- Arrest
- Aval
- Co-signing
- Indemnity
- Loan guarantee
- Surety bond
- Surety (Canadian criminal law)
- Student Loan Guarantor
References
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This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (November 2010) |
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Translations:
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Surety
Dansk (Danish)
n. - kautionist, kaution, selvskyldner
idioms:
- stand surety for kautionere for
Nederlands (Dutch)
borg, borgsteller, zekerheid
Français (French)
n. - (Fin, Jur) dépôt de garantie, caution, garant
idioms:
- stand surety se porter garant
idioms:
- stand surety bürgen für
Ελληνική (Greek)
n. - βεβαιότητα, (νομ.) εγγυητής, εγγύηση
idioms:
- stand surety for μπαίνω εγγυητής για
Italiano (Italian)
cauzione, fideiussore
idioms:
- stand surety for farsi garante di
Português (Portuguese)
n. - segurança (f)
idioms:
- stand surety for servir de fiador por
Русский (Russian)
уверенность, поручительство, гарантия, поручитель, гарант
idioms:
- stand surety for поручиться за кого-л.
Español (Spanish)
n. - fianza, garantía, fiador, garante
idioms:
- stand surety ser el fiador de uno, salir garante por, salir fiador de
Svenska (Swedish)
n. - säkerhet, visshet, borgen, borgensman
中文（简体）(Chinese (Simplified))
保证人, 担保, 保证
idioms:
- stand surety for 为某人做保证人
中文（繁體）(Chinese (Traditional))
n. - 保證人, 擔保, 保證
idioms:
- stand surety for 為某人做保証人
idioms:
- stand surety for ~의 보증인이 되다
日本語 (Japanese)
n. - 保証, 抵当, 引受人, 連帯保証業者
العربيه (Arabic)
(الاسم) ثقه , يقين , الكفيل , الضامن
עברית (Hebrew)
n. - ערב (להלוואה), בטוחה, ערבות, ודאות
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American Heritage Dictionary
The American Heritage® Dictionary of the English Language, Fourth Edition Copyright © 2007, 2000 by Houghton Mifflin Company. Updated in 2009. Published by Houghton Mifflin Company. All rights reserved.
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Barron's Banking Dictionary
Dictionary of Banking Terms. Copyright © 2006 by Barron's Educational Series, Inc. All rights reserved.
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Dictionary of Real Estate Terms. Copyright © 2008 by Barron's Educational Series, Inc. All rights reserved.
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Roget's II: The New Thesaurus, Third Edition by the Editors of the American Heritage® Dictionary Copyright © 1995 byHoughton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved.
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McGraw-Hill Dictionary of Architecture and Construction. Copyright © 2003 by McGraw-Hill Companies, Inc. All rights reserved.
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