This is known as a guarantee.
A guarantee is a contractual agreement that guarantees the truthfulness of a condition, fact, or circumstance throughout the duration of the contract. It provides assurance that the agreed upon terms will be upheld. In other words, it acts as a safeguard for both parties involved, ensuring that the agreed upon terms will be fulfilled. This concept is a crucial aspect of finance, as it helps to mitigate risk and provide security in business transactions. Without a guarantee, there is a higher chance of uncertainty and potential financial loss. Therefore, understanding the significance of guarantees in contracts is essential for any individual in the field of finance.
