Aval Law and Legal Definition
Aval or endorsement is a shared common commitment of payment of an obligation in favor of the creditor or beneficiary. It is granted by a third party, in case the first party does not fulfill the obligation of the payment of a credit title. The third party here is called the guarantor. The guarantor agrees to cover the payment of the amount of credit title and interest in case the guarantee does not fulfill his or her obligation.
Article 46 of the UNCITRAL Convention On International Bills Of Exchange And Promissory Notes 1988, provides “ payment of an instrument may be guaranteed either before or after acceptance as to the whole or part of its amount for the account of a party or the drawee. A guarantee may be given by any person who may or may not be a party. A guarantee is expressed by the words“guaranteed” “aval” or “good as aval” or words of similar import , accompanied by the signature of the guarantor or effected by a signature alone in front of the instrument.”