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Commercial Law

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Question:

What is a guarantee?

Author: Kuba Pastula



Answer:

A secondary, or parasitic, form of liability. If the main contract is void, the guarantee falls with it, as there is no obligation under the main contract for the guarantor to assume. The holder of the guarantee (the creditor) cannot pursue the guarantor (the third party) unless the debtor has failed to pay. For a guarantee to be enforceable, it must be evidenced in writing


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