Guarantee or indemnity? — a useful tale
A guarantee is a promise between two parties (X and Y) to fulfil an obligation of a third party (Z) — X’s liability as guarantor usually only arises if Z fails to pay Y and is secondary to Z’s primary liability.
By contrast, under an indemnity, X agrees to be responsible for any loss to Y, independently of the obligations of Z to Y; X is treated as having a primary liability to Y.
In a recent case — ABN AMRO Commercial Finance plc v McGinn and others  EWHC 1674 — an invoice discounter purchased the debts of a company whose directors signed an indemnity in the discounter’s favour. The company went into administration and many debts were disputed…
Click on the link below to read the rest of the Gateley briefing.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from The Lawyer
Briefings from Gateley Plc
When negotiating to buy a business, a buyer will often ask the seller to sign an exclusivity (or lock-out) agreement.
How do I ensure I have an enforceable liquidated damages clause rather than a penalty clause?
Analysis from The Lawyer
Gateley bigshots see personal wealth soar on flotation, but face penalties for early exit .
Gateley is to float on the London Stock Exchange, becoming the first UK firm to list itself as a public limited company. But why would a firm would look to float, and what it could mean for the industry?