Suretyship
An undertaking where one person or entity agrees to be responsible for another person's debt or obligation if that person defaults.
Definition
Suretyship can expose a surety to serious financial risk. The practical review usually starts with the signed suretyship wording, the principal debt, credit agreement, notices, limitation clauses, payment history, and whether the suretyship was linked to a business, loan, lease, or other transaction.
Key takeaways
An undertaking where one person or entity agrees to be responsible for another person's debt or obligation if that person defaults.
Banking and Finance
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Related legal problems
This glossary provides general information only and does not constitute legal advice.
Common situations
Suretyship claim
Business loan guarantee
Personal guarantee dispute
Related resources
Resources and guides
Banking and Finance Document Pack
Banking and Finance Document Pack: prepare Credit agreement, Loan agreement, Security documents and identify missing records before legal advice.
Banking and FinanceChecklistCredit And Finance Checklist
Credit And Finance Checklist for preparing documents, facts, dates, and questions connected to banking and finance.
Banking and FinanceFAQs
Suretyship FAQs
What does Suretyship mean?
An undertaking where one person or entity agrees to be responsible for another person's debt or obligation if that person defaults.
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