Legal Definitions - subsuretyship

Definition: Subsuretyship is a legal agreement where a person or company agrees to be responsible for paying back a debt if the primary guarantor is unable to do so.

Example: Let's say John takes out a loan from a bank to start a business. The bank requires him to have a guarantor in case he is unable to pay back the loan. John's friend, Tom, agrees to be the guarantor. However, the bank is still not satisfied and requires a subsurety. Tom then asks his brother, Mike, to be the subsurety. This means that if John is unable to pay back the loan, Tom will first be responsible for paying it back. If Tom is unable to pay, then Mike will be responsible for paying back the loan.

Explanation: This example illustrates how subsuretyship works in a practical situation. It shows how multiple parties can be involved in guaranteeing a loan and how subsuretyship provides an extra layer of security for the lender.