The Effects of Cautionary Guaranty in Commercial Papers(Study in the Jordanian Law)

This study aims to show the importance of cautionary guaranty as one of the measures granted by law to protect holders of commercial papers. The study also underscores the legal influence of cautionary guaranty as pertaining to the legal relation between the involved parties, the commitment of the cautionary guarantor who has both a dependent and an original status, and ensued effects of this relation. In the first part, a special emphasis is placed on the effect of cautionary guaranty on the legal relation between the cautionary guarantor and the holder of the commercial paper. This is done through explaining the legal nature of the commitment of the cautionary guarantor and results entailed by this commitment. In the second part of the study, the researcher deals with the legal relation between the cautionary guarantor, the guaranteed, and the rest of the parties committed to the commercial paper. In the process, the researcher endeavors to point out potential legal conflicts among the involved parties in cautionary guaranty. Throughout, there are references to legal texts that deal with the effects of cautionary guaranty, juristic opinions, and available judicial rulings related to the subject matter. The study concludes by stating legislative shortages of rulings that are concerned with organizing the relation between the different parties. It also recommends the importance of reconsidering the wording of some legal texts that deal with cautionary guaranty especially as they address any legal conflict that can ensue out of the relation between the different parties involved in the cautionary guaranty.