Guaranty Agreement is can be across future and Morden liability and classified under specific & continuing guarantee. Creditor, Debtor, and surety these three parties involved in Continuing Guaranty Agreement.
Important Parties are Involved in the Guaranty Agreement
1. Surety: The guarantor who accepts the responsibility of paying money for another person on defaulting.
2. Principal Debtor: is the debtor who gives the guarantee is a continuing guarantee.
3. Creditor: The person to whom the guarantee is offered is the creditor
Continuing Guaranty Agreement is a legal meaning because it is different from the guaranty of one specific obligation. Most commercial loan transactions are continuing guaranties.
It is a future liability of the principal, under continuous transactions, which either continue his responsibility or from timely renew it after been completed, is called a continuing guaranty.