October 5, 2006 “Guaranty” or “Guarantee”?
Today, for the heck of it, I investigated the difference between guaranty and guarantee.
Here’s what Bryan Garner says in A Dictionary of Modern Legal Usage (1995):
The distinction in BrE once was that the former [guarantee] is the verb, the latter [guaranty] the noun. Yet guarantee is now commonly used as both n. & v.t. in both AmE and BrE. … .
In practice, guarantee, n., is the usual term, seen often, for example, in the context of consumer warranties or other assurances of quality or performance. Guaranty, in contrast, is now used primarily in financial and banking contexts in the sense “a promise to answer for the debt of another.” Guaranty is now rarely seen in nonlegal writing, whether in G.B. or in the U.S. Some legal writers prefer guaranty in all nominal senses.
Guaranty was formerly used as a verb but is now obsolete as a variant of guarantee, v.t.
That seems straightforward enough, but Bryan goes on to refer to the “more modern legal use” of guaranty as a noun in the following example: “Footnote 10 indicates that Congress is without power to undercut the equal-protection guaranty of racial equality in the guise of implementing the Fourteenth Amendment.” I’m not sure how that relates to his statement that it’s now used primarily in finance and banking.
The New Fowler’s Modern English Usage (R. W. Burchfield ed., 3d ed. 1996) offers what appears to be a simple rule:
Guarantee, guaranty. “Fears of choosing the wrong one of these two forms are natural, but needless. As things now are, -ee is never wrong where either is possible” (Fowler, 1926). The advice is still sound.
But this raises the question, When is either possible, as opposed to just one or the other?
For what it’s worth, here’s some empirical evidence on use of guaranty and guarantee as nouns: In the past year, guaranty and its plural guaranties were used in all capitals in 2,809 contracts filed on the SEC’s EDGAR system. By contrast, in the past year guarantee and guarantees were used in all capitals in 2,083 contracts filed on EDGAR. For the most part, these words are used in all capitals only in titles, headings, and disclaimers, and it’s safe to assume that in these contexts they’re used as nouns. (I structured the searches this way so as not to retrieve these words used as verbs.) These results indicate that overall, among U.S. corporate lawyers there’s a pretty even split between guaranty and guarantee used as nouns.
When I ran the same searches but added to the search term credit agreement in all capitals, I got 788 hits for guaranty and guaranties and 279 hits for guarantee and guarantees. This suggests that in the context of finance, guaranty is indeed the preferred form of the noun.
But even in this context guarantee the noun was used a quarter of the time, so in the interest of simplicity I’m inclined to use in all contexts guarantee as both noun and verb. To insist on a distinction between the noun forms guaranty and guarantee is to invite continued confusion.
October 9, 2006 at 7:44 am
Thanks to reader Scott Meyer for pointing out some glitches in the original post. Ken
February 12, 2008 at 11:18 pm
Hey Thanks for that explanation.
I was writing a technical Specification for a Equipment for the client company. And i had initially written Guaranty. But when it was returned with Client comments , they corrected it as Guarantee. And dictionary.com dint mentioned any difference in the words. So a google search led me here. Thanks for the effort. Clears up the confusion.
March 24, 2008 at 10:07 am
Ken,
Love your site. Wondering if you can provide further explanation of the terms in the “verb” context. Above you point out that, in the noun sense, the plural of “guaranty” is “guaranties.” Would the same hold true for the verb context. I was struck by this in reviewing the recent JP Morgan — Bear Stearns “Guaranty Agreement” available here: http://graphics8.nytimes.com/images/blogs/dealbook/BSguaranty.pdf
Paragraph 1 states: “The Guarantor hereby unconditionally guaranties . . . .”
I assume this is correct, but would love your confirmation.
Thanks in advance.
March 24, 2008 at 10:14 am
Jim: Interesting. As noted in my quote from Garner’s book, guaranty is an obsolete form of the verb. Ken
October 17, 2008 at 9:52 am
Very interesting and useful article. I’m right now studying real estate contracts and the text I’m using uses “guaranty” as a verb: “the buyer would prefer a warranty deed to guaranty that the title is good…” The book was printed in 2005.
Funny enough this same book caused me to do a search for will vs shall less than an hour ago.
I honestly think part of the reason these obsolete and seemingly ambiguous terms and word forms are generally restricted to fine print in contracts is to keep people from understanding what the clauses mean without the aid of an attorney. I’m glad there are sites like this that help clear up what could be costly confusions for people like us. Keep up the good work!
November 7, 2008 at 11:41 am
Dear Ken,
Thanks for your research on “guaranty” versus “guarantee”; I found your article via a Google search. As a Mathematician/Scientist, I am disappointed with the messy results. If I were Dictator of the Universe, I would decree that Guaranty/Guarantee must follow the beautiful and logical example of Warranty/Warrantee … ((
June 21, 2009 at 11:25 am
Ken, my 1957 edition of Black’s gives the primary definition of “guarantee” as “One to whom a guaranty is made.” That has always guided me, and thus I like the “warranty/warrantee” point made in Dr. Kozuh’s post. Having said all that, in my corporation I am not only the only person who uses “guaranty,” I seem to be the only person who cares about the distinction. “Guarantee” is winning out. All best.
July 28, 2009 at 8:18 pm
Super helpful! Thank you for the research!
December 10, 2009 at 12:23 pm
Thank you!
January 4, 2010 at 9:45 pm
[...] the way, while we’re on the topic, you might find of interest this October 2006 blog post on guaranty or [...]
January 13, 2010 at 5:54 pm
Drafting resolutions related to financing led me to this most interesting and helpful post. I personally feel more comfortable using “guaranty” as a noun and “guarantee” as a verb, though I can’t substantiate why. I wonder—would it be a glaring inconsistency to use both spellings in the same document based on this usage?
January 13, 2010 at 6:13 pm
Katie: The distinction you prefer is the traditional one, so reflecting that distinction in a document wouldn’t raise eyebrows. Ken
March 15, 2010 at 1:58 am
I'm not a lawyer, so, correct me if I am wrong or if this passes for "sound confusion":
"Guarantor guaranties that Guarantee may rely upon the Guaranty for the duration of the Guaranty; in so far as Guarantee requests satisfaction under the Guaranty for a guaranteed obligation from Guarantor in writing and in so far as Guarantor maintains the legal means for duration of Gauranty to facilitate fulfillment of the Guaranty for Guarantee."
?