Guarantee bonds are a dangerous form of security, liable to be voided by what may appear to be a most trivial incident not affecting in any way the equities of the situation.

A special form used by banks is given in Figure 41. In cases where a guarantor is also a creditor of the borrower it is generally the custom to obtain a postponement of the former's claim in favor of the bank.

It must be borne in mind that a bond of guarantee would become ineffective in all such cases, even if the business of a firm or individual were converted into a stock company, or if the ownership of a business changed, altho the same business style should be continued.