Personal guarantee

personal guarantee: a legal contract pursuant to which a person (a guarantor) agrees to be liable for the obligations of the party who is primarily responsible, in the event that the primary obligor defaults on those obligations; as guarantors will often take limited benefit from providing the personal guarantee yet expose themselves to substantial risk, great care should be taken to ensure guarantors understand the personal guarantee; personal guarantee disputes – litigation over the enforceability of personal guarantees – frequently arise.