AVAL

A B C D E F G H I J L M N O P Q R S T U V W Y Z
AVAL — (from Fr. aval) a third-party guarantee of payment on a bill of exchange or promissory note. The party providing the guarantee (the avalist) is liable to the holder for the fulfillment of obligations by any of the liable parties, such as the acceptor, drawer, or endorser. An aval is certified by the avalist's signature on the bill itself or on an attached sheet (allonge). It serves to increase the creditworthiness of the instrument. If the avalist pays the bill, they acquire all rights arising from it against the party for whom the guarantee was given. An aval can cover the full amount or a partial amount of the bill. See also ENDORSEMENT.