collateral promise
- A secondary assurance, usually made for paying someone else's debt that is not for the maker's benefit. It is attached but secondary to a primary agreement and must be documented in writing to be legally binding
- The bank required a collateral promise from the company's CEO to secure the loan.
- In case John defaults on the loan, his uncle has given a collateral promise to the bank.
- For the property purchase, the financier demanded a collateral promise instead of physical collateral.
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