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Difference Between Guarantee And Pledge
Is a guarantee different from a pledge?
A guarantee is a commitment that is made by one party in a contract whereas a pledge constitutes a fixed asset, reserved for the purpose of claiming a debt. It is not permissible to furnish a guarantee or a pledge in amanah, or trust, contracts such as Mudarabah, Musharakah and Wadia. However, a guarantee may be provided to mitigate risk in case of negligence or misconduct of either of the contracting parties.

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