Meaning & use
Suretyship
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A legal arrangement in which one person or entity (a surety) agrees to be responsible for the debt or obligation of another if that person defaults.
See it in a sentence
The bank required a suretyship agreement before approving the loan for the small business.
Under the contract's suretyship clause, the parent company guaranteed the subsidiary's obligations.
A note on using this word
Suretyship differs from insurance in that a surety expects the principal debtor, not itself, to ultimately bear the loss.
Words with a similar meaning
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