Legal Forms Glossary

Continuing Guaranty (limited)

A guaranty is an agreement in which one party (the guarantor) promises that if a borrower doesn't pay back its loan, the guarantor will make payments on the borrower's behalf. In a continuing guaranty, the guarantor agrees to back up everything the borrower owes to the lender, no matter how many notes or transactions are involved. However, this document is limited in amount, which means there is a cap on the amount that the guarantor is ensuring. If the borrower's debts go beyond that, the guarantor is not promising to pay those amounts if the borrower doesn't.