Garantie de la Garantie

English translation: Surety

GLOSSARY ENTRY (DERIVED FROM QUESTION BELOW)

French term or phrase:	Garantie de la Garantie
English translation:	Surety
Entered by:	anders1956

18:56 Nov 27, 2018

French to English translations [PRO]
Law/Patents - Law: Contract(s) / Contract for Transfer of Company Shares

French term or phrase: Garantie de la Garantie

I am translating a Contract for Transfer of Company Shares from French into English.

The problem phrase is THIS:
"Garantie de la Garantie".

The document gives THIS explanation:

Désigne les garanties autonomes à première demande émises par les Vendeurs en faveur de l'Acquéreur, en garantie des engagements souscrits par le Garant au titre de la garantie d'actif et de passif.

Can anyone help with the precise ENGLISH equivalent, please?
Thank you!!

RE Anderson
Chicago, IL, USA

anders1956
United States

Surety

Explanation:
No need for repetition, as a surety is, by definition, a guarantee of an obligation (the second "garantie" in the French)

https://en.wikipedia.org/wiki/Surety
In finance, a surety, surety bond or guaranty involves a promise by one party to assume responsibility for the debt obligation of a borrower if that borrower defaults.

http://www.fluxmans.com/warranty-guarantee-suretyship-selwyn...

https://www.investopedia.com/terms/s/surety.asp
The surety provides a financial guarantee to the obligee that the principal will fulfill their obligations.

Selected response from:

B D Finch
France
Local time: 08:30

Grading comment

This worked best in context.
Thank you!
REA / Chicago
4 KudoZ points were awarded for this answer

Summary of answers provided

Guarantee of the Warranty

Eliza Hall

3 -1

Surety

B D Finch

Discussion entries: 3

Eliza Hall

United States

Maybe suretyship but...

03:28 Nov 28, 2018

(Part 2 of 2 - see previous comment first).

So, there are at least 3 ways to guarantee the warranties that the seller gave the buyer: price structure, escrow, or the use of a surety. Escrow = un dépôt fiduciaire or un séquestre (seller gives $ to third party, to be released at a later date to the proper party as defined in the escrow contract, i.e., either to the buyer or back to the seller, depending on what happens in the future).

And here's an explanation of suretyship: http://www.alsurety.org/content.aspx?page_id=22&club_id=3840...

Normally a garantie autonome à première demande indicates that you're using a surety: https://www.jurisconsulte.net/fr/lexique/id-255-garantie-a-p...

However, I'm thrown by the phrase "émises par les Vendeurs." A seller can't act as its own surety, since by definition a surety is a third party, so I'm puzzled how it could "émettre"/issue the garanties de la garantie. Perhaps this is a specialized term that actually means the seller acquired a surety bond or surety contract for the benefit of the seller? But normally a garantie is émise by the guarantor (e.g. 3rd-party bank or insurance company). So I'm a bit confused.

Eliza Hall

United States

Explanation - what this contract provision means

03:17 Nov 28, 2018

(1 of 2) Here are some links to clarify what's going on in Anders' contract:

La garantie de la garantie de passif et d'actif: https://www.lesechos.fr/16/02/1995/LesEchos/16838-072-ECH_la... and http://www.cession-entreprise.com/conseils/les-garanties-de-...

Garantie à première demande: https://www.jurisconsulte.net/fr/lexique/id-255-garantie-a-p...

The basic gist is this: the Seller has given the Buyer warranties as to its assets and liabilities (actif & passif). In other words the Seller has promised that the assets and liabilities are worth X, and that if the assets decrease or liabilities increase after the sale due to something the seller did before the sale, the seller will compensate the buyer.

There are at least 3 ways to compensate: price structure (buyer pays in stages, so they can withhold later payments); escrow (seller puts $ in escrow, to be released at a later date to buyer if assets change, or back to seller if they don't); or surety (seller contracts with a third party to have that party compensate buyer -- sort of like insurance, but not always literally insurance).

More comments to follow...

philgoddard

United States

20:36 Nov 27, 2018

I would have thought "guarantee for the guarantee" would work. It sounds odd, but then it does in French too.
What is the "garantie d'actif et de passif"?

Answers

1 hr confidence:

peer agreement (net): -1

Surety

B D Finch
France
Local time: 08:30
Specializes in field
Native speaker of: English
PRO pts in category: 369

Grading comment

This worked best in context.
Thank you!
REA / Chicago

1 day 22 hrs confidence:

Guarantee of the Warranty

Explanation:
(See my discussion comments and links there).

What this contract says is that the Seller has given the Buyer warranties as to its assets and liabilities (actif & passif). In other words the Seller has promised that the assets and liabilities are worth X, and that if the assets decrease or liabilities increase after the sale due to something the seller did before the sale, the seller will compensate the buyer. Those promises are called "warranties" in English, not "guarantees": https://legal-dictionary.thefreedictionary.com/warranty

Etymologically they're the same word, and in French they actually are the same word, but in English legalese we distinguish between warranties and guarantees.

The contract also says that the seller has guaranteed that even if those warranties turn out to be incorrect (i.e. the company's financial situation is different than stated), the buyer will be compensated so that it will be in the same financial situation as if the warranties had been right. That, in English legalese, is a guarantee, and there are several ways to do it (by engaging a surety or buying a surety bond; by getting an insurance contract; by using an escrow agent; etc.).

We don't know which kind of guarantee this seller used, and Anders can't just go back and ask the client to clarify because Anders' job is to translate a contract that already exists. A translator can't rewrite a contract; if there's an ambiguity in the real contract, it needs to also exist in the translation, so that the reader knows there's an ambiguity in the contract.

So if we say "Guarantee of the Warranties," we're saying what the contract says, but we're not adding clarity or precision to it that is not present in the original. This translation will alert the Anglophone reader that if they want to know exactly what type of guarantee was used, they'll have to ask their lawyer, dig deeper, etc. Anders can't tell them a certain kind of guarantee was used when that's not clear from the contract.

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Note added at 1 day 22 hrs (2018-11-29 17:22:22 GMT)
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PS the distinction, in US commercial contract law, is this:

"I promise that X is true" = a warranty. So anything that boils down to "the Seller promises that the company's assets are $X and its liabilities are $Y" = a warranty.

"I promise that if X isn't true, you'll still get what you bargained for" = a guarantee. So, "I promise that if the assets and liabilities turn out to be worse than I told you, somebody will pay you the difference" = a guarantee.

The ambiguity or uncertainty here is just who that somebody is: a surety? An insurance company? An escrow agent, to whom the seller has given money to hold onto, and pay to the buyer in case X turns out not to be true? We don't know, because part of the contract language makes it sound like a surety but part makes it sound like the seller (see discussion comments for why).

Since we don't know, we can't choose a specific type of guarantee in the translation; it should just be left as "guarantee."

Eliza Hall
United States
Local time: 02:30
Specializes in field
Native speaker of: English
PRO pts in category: 60

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