Comments on: “Guaranty” or “Guarantee”? http://www.adamsdrafting.com/2006/10/05/guaranty-or-guarantee/ Tue, 31 Jan 2012 01:23:03 +0000 hourly 1 http://wordpress.org/?v=abc By: Ken Adams http://www.adamsdrafting.com/2006/10/05/guaranty-or-guarantee/comment-page-1/#comment-96166 Ken Adams Thu, 28 Oct 2010 16:38:18 +0000 http://www.adamsdrafting.com/2006/10/05/guaranty-or-guarantee/#comment-96166 Dutch: The fact that this post is the most visited on my blog suggests that there's plenty of confusion. As for Black's, it quotes Garner—not surprising, seeing as he's the editor. More generally, I'm concerned not with making complex legal documents less confusing to the lay reader, but rather with making the language of business contracts less awkward and confusing for the lawyers and clients who have to read them. If you find any of my analyses lacking, I invite you to do battle with me in the marketplace of ideas. Meanwhile, I continue to see no merit in perpetuating the guaranty/guarantee distinction. Ken Dutch: The fact that this post is the most visited on my blog suggests that there's plenty of confusion. As for Black's, it quotes Garner—not surprising, seeing as he's the editor.

More generally, I'm concerned not with making complex legal documents less confusing to the lay reader, but rather with making the language of business contracts less awkward and confusing for the lawyers and clients who have to read them. If you find any of my analyses lacking, I invite you to do battle with me in the marketplace of ideas.

Meanwhile, I continue to see no merit in perpetuating the guaranty/guarantee distinction.

Ken

]]> By: Dutch http://www.adamsdrafting.com/2006/10/05/guaranty-or-guarantee/comment-page-1/#comment-96165 Dutch Thu, 28 Oct 2010 16:01:39 +0000 http://www.adamsdrafting.com/2006/10/05/guaranty-or-guarantee/#comment-96165 Nice, clear explanation, JMM, and you explained it the way that I explained it when I was training young associates. Back when I practiced corporate finance law (including asset-backed lending and structured finance), we used three different words to serve three different meanings. The "guaranty" is the obligation of the "guarantor" in favor of the "guarantee" (or the "beneficiary). When properly and consistently used in the documents, there is no confusion about whether the "ee" means X or Y or perhaps either or both. I believe that Black's supports this usage. The risk of removing "technical usage" from complex legal documents simply to make them less confusing to the lay reader is that in many cases technical usage arises to clarify, not to obfuscate (as some intimate). I mean no offense to Mr. Garner, I've worked with him in the past and agree with him in most cases. Just not this one. Nice, clear explanation, JMM, and you explained it the way that I explained it when I was training young associates. Back when I practiced corporate finance law (including asset-backed lending and structured finance), we used three different words to serve three different meanings. The "guaranty" is the obligation of the "guarantor" in favor of the "guarantee" (or the "beneficiary). When properly and consistently used in the documents, there is no confusion about whether the "ee" means X or Y or perhaps either or both. I believe that Black's supports this usage. The risk of removing "technical usage" from complex legal documents simply to make them less confusing to the lay reader is that in many cases technical usage arises to clarify, not to obfuscate (as some intimate). I mean no offense to Mr. Garner, I've worked with him in the past and agree with him in most cases. Just not this one.

]]> By: Peter Selinger http://www.adamsdrafting.com/2006/10/05/guaranty-or-guarantee/comment-page-1/#comment-95811 Peter Selinger Wed, 11 Aug 2010 14:52:32 +0000 http://www.adamsdrafting.com/2006/10/05/guaranty-or-guarantee/#comment-95811 "As things now are, -ee is never wrong where either is possible." ... "But this raises the question, When is either possible, as opposed to just one or the other?" I believe that in the context of Fowler's quote, "either" means "one or the other". First, the quote is otherwise meaningless. To say that "-ee" is possible whenever both "-ee" and "-y" are possible would be a tautology. It is unlikely that Fowler intended to make a tautologous statement. Second, "either" is singular. If he had really meant "both", it is likely that he would have written "both". Third, from a logical point of view, "either" appears here in a negative position, i.e., in a condition ("when either is possible"). Like the word "any", the word "either" usually means "at least one" when it is used in negative positions. Compare: "If either of you makes a mistake, the project will fail"; "Fraud and theft are potential problems. If either is possible, our investment is not secure". Fourth, the sentence containing "either" is offered to substantiate the preceding sentence, "Fears of choosing the wrong one of these two forms are natural, but needless". So I think the only meaningful reading is: "whenever one of -ee or -y is possible, then -ee is never wrong". Of course this is logically equivalent to "when -y is possible, then so is -ee". "As things now are, -ee is never wrong where either is possible."
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"But this raises the question, When is either possible, as opposed to just one or the other?"

I believe that in the context of Fowler's quote, "either" means "one or the other".

First, the quote is otherwise meaningless. To say that "-ee" is possible whenever both "-ee" and "-y" are possible would be a tautology. It is unlikely that Fowler intended to make a tautologous statement.

Second, "either" is singular. If he had really meant "both", it is likely that he would have written "both".

Third, from a logical point of view, "either" appears here in a negative position, i.e., in a condition ("when either is possible"). Like the word "any", the word "either" usually means "at least one" when it is used in negative positions. Compare: "If either of you makes a mistake, the project will fail"; "Fraud and theft are potential problems. If either is possible, our investment is not secure".

Fourth, the sentence containing "either" is offered to substantiate the preceding sentence, "Fears of choosing the wrong one of these two forms are natural, but needless". So I think the only meaningful reading is: "whenever one of -ee or -y is possible, then -ee is never wrong". Of course this is logically equivalent to "when -y is possible, then so is -ee".

]]> By: JMM http://www.adamsdrafting.com/2006/10/05/guaranty-or-guarantee/comment-page-1/#comment-95447 JMM Sun, 06 Jun 2010 05:26:50 +0000 http://www.adamsdrafting.com/2006/10/05/guaranty-or-guarantee/#comment-95447 This just came up in an argument yesterday and I have to agree that it should follow all of the other similar word structures. I bet that this was screwed up a long time ago by some influential person and that's why it stuck. I will continue to use it the way the language itself defines it: The guarantor provides a guaranty to the guarantee. [<rant>although homophones annoy me, not that it matters here</rant>] This just came up in an argument yesterday and I have to agree that it should follow all of the other similar word structures. I bet that this was screwed up a long time ago by some influential person and that's why it stuck. I will continue to use it the way the language itself defines it: The guarantor provides a guaranty to the guarantee. [<rant>although homophones annoy me, not that it matters here</rant>]

]]> By: Jason http://www.adamsdrafting.com/2006/10/05/guaranty-or-guarantee/comment-page-1/#comment-94960 Jason Mon, 15 Mar 2010 01:58:43 +0000 http://www.adamsdrafting.com/2006/10/05/guaranty-or-guarantee/#comment-94960 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." ? 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."
?

]]> By: Ken Adams http://www.adamsdrafting.com/2006/10/05/guaranty-or-guarantee/comment-page-1/#comment-94671 Ken Adams Wed, 13 Jan 2010 23:13:45 +0000 http://www.adamsdrafting.com/2006/10/05/guaranty-or-guarantee/#comment-94671 Katie: The distinction you prefer is the traditional one, so reflecting that distinction in a document wouldn't raise eyebrows. Ken Katie: The distinction you prefer is the traditional one, so reflecting that distinction in a document wouldn’t raise eyebrows. Ken

]]> By: Katie http://www.adamsdrafting.com/2006/10/05/guaranty-or-guarantee/comment-page-1/#comment-94670 Katie Wed, 13 Jan 2010 22:54:32 +0000 http://www.adamsdrafting.com/2006/10/05/guaranty-or-guarantee/#comment-94670 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? 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?

]]> By: AdamsDrafting » Blog Archive » “Guarantees That” http://www.adamsdrafting.com/2006/10/05/guaranty-or-guarantee/comment-page-1/#comment-94621 AdamsDrafting » Blog Archive » “Guarantees That” Tue, 05 Jan 2010 02:45:39 +0000 http://www.adamsdrafting.com/2006/10/05/guaranty-or-guarantee/#comment-94621 [...] the way, while we’re on the topic, you might find of interest this October 2006 blog post on guaranty or [...] [...] the way, while we’re on the topic, you might find of interest this October 2006 blog post on guaranty or [...]

]]> By: Dan http://www.adamsdrafting.com/2006/10/05/guaranty-or-guarantee/comment-page-1/#comment-94067 Dan Thu, 10 Dec 2009 17:23:22 +0000 http://www.adamsdrafting.com/2006/10/05/guaranty-or-guarantee/#comment-94067 Thank you! Thank you!

]]> By: Andrew http://www.adamsdrafting.com/2006/10/05/guaranty-or-guarantee/comment-page-1/#comment-92746 Andrew Wed, 29 Jul 2009 00:18:06 +0000 http://www.adamsdrafting.com/2006/10/05/guaranty-or-guarantee/#comment-92746 Super helpful! Thank you for the research! Super helpful! Thank you for the research!

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