A guarantee is a type of contract whereby an individual or legal entity undertakes to meet the guaranteed party’s obligations to a third party if the guaranteed party (obligor) fails to do so.
What is the function of a guarantee?
A guarantee is an agreement through which an individual or legal entity undertakes to meet certain obligations, such as paying a third party’s debt if the latter defaults.
Types of bank guarantees
Guarantees in Spain can be classified by their duration, the beneficiary’s claims against the guarantor and the underlying obligation being guaranteed.
Guarantees when buying a home
When you buy a house from a property developer, any sums paid in advance must be either covered by an insurance policy taken out by the property developer, naming the buyer as the beneficiary, or guaranteed by a bank.