Aval (or endorsement), in Spain, is a joint commitment to payment of an obligation in favor of the creditor or beneficiary. It is granted by a third party, in case the principal debtor does not fulfil the obligation of payment of a credit title.
The practice of requesting an aval from a prospective borrower has become commonplace since the 2008 global financial crisis.
According to the Oxford English Dictionary, the word is derived from the French à val ("at the bottom"); according to the Trésor de la langue française, it is probably an abbreviation of the formula à valoir. However, it might also come from hawala, an informal value transfer system in the Muslim sharia law which influenced the development of aval in French law and the avallo in Italian law.
The endorsement implies that a third party, known as a surety or guarantor, is jointly liable for the full amount of the debt with the principal debtor. The third party (guarantor) commits himself to cover the payment of the amount of the credit title and its interest, in case the original debtor does not fulfil his or her obligation.
Normally the prospective lender may require a guarantor for the loan if the prospective borrower's credit is inadequate. This assures the bank or other lender that, if the borrower defaults, the guarantor can be held responsible for the remainder of the loan left unpaid.
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- Simpson, JA; Weiner, ESC, eds. (1989), "aval", The Oxford English Dictionary (entry) 1 (2nd ed.), p. 812, ISBN 0-19-861213-3.
- "aval2", Trésor de la langue française informatisé [Informatised treasure of the French language] (entry) (in French), retrieved June 6, 2011.
- Badr, Gamal Moursi (Spring 1978). "Proceedings of an International Conference on Comparative Law, Salt Lake City, UT, February 24–25, 1977]". American Journal of Comparative Law 26 (2): 187–98. doi:10.2307/839667. JSTOR 839667.
- "19", Bill of Exchange Law, CZ: Muni.
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