Guarantor

A guarantor refers to a person who pledges a certain amount of collateral for the contract of another person.

Additional Sources

Answers.com

One, such as a person or corporation, that makes or gives a promise, assurance, or pledge typically relating to quality, durability, or performance.

One who makes or gives a guaranty.

Duhaime Legal Dictionary

A person who pledges payment or performance of a contract of another, but separately, as part of an independently contract with the obligee of the original contract.

Law.com Dictionary

n. a person or entity that agrees to be responsible for another's debt or performance under a contract if the other fails to pay or perform.

Lect Law Library

A secondary party who becomes obligated to repay a debt for the party primarily responsible who has failed to repay the obligation.

Wikipedia

A surety or guarantee, in finance, is a promise by one party (the guarantor) to assume responsbility for the debt obligation of a borrower if that borrower defaults. The person or company that provides this promise, is also known as a surety or guarantor.

The situation in which a surety is most typically required is when the ability of the primary obligor or principal to perform its obligations under a contract is in question, or when there is some public or private interest which requires protection from the consequences of the principal's default or delinquency. In most common law jurisdictions, a contract of suretyship is subject to the statute of frauds (or its equivalent local laws) and is only enforceable if recorded in writing and signed by the surety and the principal.

If the surety is required to pay or perform due to the principal's failure to do so, the law will usually give the surety a right of subrogation, allowing the surety to "step into the shoes of" the principal and use his (the surety's) contractual rights to recover the cost of making payment or performing on the principal's behalf, even in the absence of an express agreement to that effect between the surety and the principal.

Traditionally a guarantee was distinguished from a surety in that the surety's liability was joint and primary with the principal, whereas the guaranty's liability was ancillary and derivative, but many jurisdictions have abolished this distinction.

In the United States, under Article 3 of the Uniform Commercial Code, a person who signs a negotiable instrument as a surety is termed an accommodation party; such a party may be able to assert defenses to the enforcement of an instrument not available to the maker of the instrument.