Guarantees
A guarantee is an arrangement involving three parties. One party (the guarantor) promises to be responsible for the obligations which a second party owes to a third party. If the second party defaults, the guarantor assumes the liabilities or obligations owed by the first party to the third party.
A guarantee may be provided by a guarantor in relation to work, goods and materials or other obligations performed, supplied or assumed by a party and is separate to the underlying contract to perform the work, supply the goods and materials or assume other obligations.