avalist

An avalist is a person or institution that provides an aval, a form of guarantee attached to a negotiable instrument such as a bill of exchange, promissory note, or lease. By signing as aval, the avalist undertakes to pay the amount due or ensure performance if the primary obligor defaults or fails to meet the instrument’s terms.

The aval increases the instrument’s creditworthiness and can facilitate acceptance and prompt payment in commercial transactions. Banks commonly act as avalists, but any credible party may do so. The avalist’s liability is typically separate from the principal debtor and may be immediate upon demand or at the instrument’s maturity, depending on the instrument and governing law. Some systems treat the aval as a strong form of suretyship, while others may frame it as a contingent or secondary obligation.

Creating an aval usually involves the avalist signing the instrument or attaching a separate guarantee endorsed to the instrument. The terms of the aval, including its scope and triggers, are defined by the instrument and applicable legal framework. If the debtor performs, the avalist’s obligation ends; if the debtor defaults and the holder pays, the avalist may seek recourse against the debtor or against other guarantors.

In practice, the avalist’s creditworthiness is crucial for the credibility of the instrument; a weak avalist can undermine acceptance. The concept is most common in civil-law jurisdictions and in certain international commercial practices. In English-language usage, the term avalist is relatively rare, with guarantor or surety often serving as general equivalents.