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<h1>Contract of guarantee: surety undertakes to perform or discharge a third party's obligation upon that party's default.</h1> A contract of guarantee is a collateral undertaking to perform the promise or discharge the liability of a third person on that person's default; the guarantor is the surety, the person in respect of whose default the guarantee is given is the principal debtor, and the party receiving the assurance is the creditor. A guarantee may be oral or written.