A guarantee is a legal obligation to perform certain acts or make certain payments in the event that a third party fails to honour their obligation to do so or vice versa.
A guarantee document is any legal document that evidences the obligations that your company will have to fulfill on behalf of a third party in case the third party fails to meet them or vice versa.
Guarantees are usually given to financial or non- financial institutions before entering into a funding or purchase agreement with them.
The document will typically include information on the type of agreement; terms and conditions, and roles and responsibilities related to the obligations; tenure of the guarantee; and details on the parties involved. It also captures details of all previous obligations fulfilled by your company. The obligations commonly covered under such an arrangement include:
Having ready access to guarantee documentation enables your company to:
Ready access to guarantees documentation is important for an event tomorrow, as it helps potential investors to: