a deed of guarantee and indemnity is a type of binding legal contract, which in simple terms, means that a third party promises that the duties of another party will be fulfilled. the beneficiary will seek to have this arrangement guaranteed by a third party (the guarantor), who may be an individual or a company. if a borrower fails to perform their duties under the agreement with the lender, and a deed of guarantee and indemnity exists, then the guarantor will be responsible to fulfil the duties on behalf of the borrower. a deed of guarantee is a promise made by a person or company, which ensures that the obligations made between another party and the beneficiary will be met. in the case that the borrower defaults on their payments or cannot fulfil other obligations under their loan agreement, the beneficiary will seek that the guarantor is responsible to complete the duties. a deed of indemnity is a promise by a party, that they will compensate for loss suffered by another party. in the context of loans, a deed of indemnity usually means that a party is promising the lender that they will compensate them for any loss suffered by a default from the borrower.