Continuing Guaranty Law & Legal Definition


Continuing guaranty refers to a guaranty in which the guarantor will not be liable unless a specified event occurs. This guaranty relates to a future liability of the guarantor under successive transactions that either continue the guarantor’s liability, or from time to time renews it, after it has been satisfied is called a continuing guaranty.

A continuing guaranty may be revoked at any time by the guarantor in respect to future transactions, unless there is a continuing consideration as to the transactions that the guarantor does not give up.

The following is an example of a case law defining continuing guaranty:

Continuing guaranty is a kind of contract of guaranty that contemplates a future course of dealings between the principal debtor and the creditor over an indefinite period of time.[ Liberty Bank v. Shimokawa, 2 Haw. App. 280 (Haw. Ct. App. 1981)]