guarantor

  

Definition

Person or firm that endorses a three party agreement to guarantee that promises made by the first party (the principal) to the second party (client or lender) will be fulfilled, and assumes liability if the principal fails to fulfill them (defaults). In case of a default, the guarantor must compensate the lender or client, and usually acquires an immediate right of action against the principal for payments made under the guarantee.

Use guarantor in a sentence

  • Edward was a little uncertain about his partners in the deal and, as a result, encouraged to be working with a strong guarantor like Great North American First Allied Bank and Trust.

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  • The student wasn't able to purchase his first car without having a guarantor on his loan to ensure payments were made.

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  • I am listed as the guarantor on my son's student loans so every month I make sure he has paid the minimum amount due.

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