ABA Survey of Virginia State Law of Guaranties

By on March 20, 2013

As seen in: the ABA Business Law Section

Introductory Note: In order to standardize our discussion of the law of guaranties, we use the following vocabulary to refer to the various parties to a guaranty and their obligations.

Guarantor” means a person who, by contract, agrees to satisfy an underlying obligation of the primary obligor to an obligee upon the primary obligor’s default on the underlying obligation.

Guaranty” means the contract by which the guarantor agrees to satisfy the underlying obligation of a primary obligor to an obligee in the event the primary obligor defaults on the underlying obligation.

Obligee” means the person to whom the underlying obligation is owed.  For example, the lender under a loan agreement would be an obligee vis-à-vis the borrower.

Primary obligor” means the person who incurs the underlying obligation to the obligee.  For example, the borrower under a loan agreement would be a primary obligor.

Underlying obligation” means the obligation or obligations incurred by the primary obligor and owed to the obligee.  For example, the borrower’s obligation to make payments to a lender of principal and interest on a loan constitutes an underlying obligation.

For the full article please click:  ABA Guarantee Survey Redline 9-4-12

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